THE Bangko Sentral ng Pilipinas (BSP) said long-term foreign investors will still be keen to invest in the country amid renewed global uncertainties and risks in international markets.
In an e-mailed response to the BusinessMirror, BSP Deputy Governor for Monetary Stability Diwa C. Guinigundo said foreign direct investment (FDI) inflows are expected to continue in the remaining months of 2014.
Latest data from the central bank showed that FDI—or investments placed by global investors in the Philippines with long-term prospects—hit a net inflow of $3.6 billion in the first six months of the year.
This is higher than the $2-billion inflows in the same period last year. It also exceeds the government’s FDI inflow assumption of $1 billion for the entire year.
Likewise, the BSP recently released its monthly data on selected Philippine economic indicators, including a detailed account of FDI flows in the country.
Data shows that the United States is still the country’s top investor, accounting for 59.37 percent of the total investments from January to June this year. Next to the US is Japan, with 12.37 percent of the total FDI toward the country in the first half of the year.
This is a turnaround from last year, when the United States pulled out most of its long-term investments in the country, accounting for -145.67 percent of the FDI movements. Japan, meanwhile, was the largest investor in the first half of last year, accounting for 82.61 percent of the total inflows.
Japan is not only the Asian country to shy away from investing into the Philippines as the Association of South East Asian Nations pulled its investments out of the Philippines with a net outflow of 10.62 percent in January to June this year.
This is in contrast to last year’s 14.53-percent net inflows from January to June. The European Union, meanwhile, has posted a renewed interest to put direct investments toward the Philippines, rebounding from -1.85 percent last year to 2.2 percent of the total inflow this year.
Guinigundo added that he expects the FDI inflows for the remaining months of the year to be channeled to the manufacturing sector—particularly in the production of electronic supplies, printers and memory. The utilities and real-estate activities sector will also be among the top recipients of the continued inflow.
He also said that the year’s forecast—which the country has already exceeded—will be reviewed again in their biannual economic assessment around October to November this year.