In observance of the Holy Week, the Philippine News Agency’s online news service will be off on March 29, Good Friday, and March 30, Black Saturday. Normal operations will resume on March 31, Easter Sunday.

— The Editors

Economist bullish on rebound of FDIs

By Joann Villanueva

March 10, 2023, 8:58 pm

<p><strong>RECOVERY</strong>. Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort is hopeful about the rebound of foreign direct investment (FDI) inflows to the Philippines given the recovery of the economy and attractive demographic. FDI inflows declined in 2022, which was traced to higher inflation and interest rates. <em>(PNA file photo)</em></p>

RECOVERY. Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort is hopeful about the rebound of foreign direct investment (FDI) inflows to the Philippines given the recovery of the economy and attractive demographic. FDI inflows declined in 2022, which was traced to higher inflation and interest rates. (PNA file photo)

MANILA – An economist is optimistic about the rebound of foreign direct investments (FDIs) to the Philippines given the continued recovery of the domestic economy.

The Bangko Sentral ng Pilipinas (BSP) reported on Friday the 23.2-percent decline of net FDIs to USD9.2 billion in 2022 compared to the previous year, and 76.2-percent drop of the net inflows in December 2022 to USD634 million, both of which were traced to higher base effects.

In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said upticks of interest rates overseas, along with the general trend of elevated inflation rate globally, likely contributed to investors’ worries, thus the drop of inflows going to the Philippines.

But as the economy continues to recover, Ricafort said “net FDIs could still be sustained among the highest since the pandemic started.”

“(The) Philippine economy (is) still expected to have one of the faster growth rates in the region,” he said, citing also the demographics, the impact of reopening of China and the investment commitments during the foreign trips of members of Marcos administration.

Ricafort said the improved diplomatic relations with developed countries and sources of foreign investments also bode well for the Philippines.

“Furthermore, the passage of reform measures in recent months, especially the CREATE (Corporate Recovery and Tax Incentives for Enterprises) law that reduces the corporate income tax by at least 5 percentage points (from 30 percent) retroactive July 2020 and providing greater certainty on investments would also continue to help attract more FDIs to be more decisive and locate in the country,” he added. (PNA)

 

Comments