FOREIGN INVESTMENTS. Foreign investment inflows to the Philippines are expected to rise further amid the reopening of the economy after the pandemic. Rizal Commercial Banking Corporation chief economist Michael Ricafort said Wednesday (May 10, 2023) that economic reform measures and commitments by businessmen during the official visits of President Ferdinand R. Marcos Jr. in several countries are also seen to boost foreign direct investments into the country. (PNA file photo)
MANILA – Foreign direct investments (FDIs) to the Philippines is expected to further rise with the reopening of the economy and investment commitments secured from various trips overseas of President Ferdinand R. Marcos Jr., according to an economist.
Data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed that FDIs posted net inflows of PHP1.05 billion in February 2023, up by 13 percent from the USD926 million in the same period last year.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the latest net FDI level is among the highest since the pandemic started.
“For the coming months, net FDIs could pick up further amid measures to further reopen the economy with no more restrictions as a policy priority, the Philippine economic/GDP (gross domestic product) growth expected to be among the fastest in the region, the country’s attractive demographics, economic reopening of China (which is the world’s second biggest economy) since December 2022, and investment commitments obtained by the administration from overseas visits/trips in recent months,” he said.
Ricafort said the inclusion of the Philippines in the world’s biggest free trade agreement, the Regional Comprehensive Economic Partnership (RCEP), “would help attract more FDIs to locate in the country as a production and/or marketing base, as well as an access point to bigger export markets of the other RCEP member countries in the region and in other parts of the world.”
“Furthermore, the passage of reform measures in recent months/years, especially the CREATE (Corporate Recovery and Tax Incentives for Enterprises Act) 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 said.
Ricafort said reforms and amendments on foreign ownership limits, such as those under the Public Services Act, Foreign Investments Act and Retail Trade Liberalization Act, “would all further encourage and attract more FDIs into the country.”
“Improved foreign policy/relations with major sources of foreign investments by the administration would also help further boost more FDIs into the country, especially with more reform measures and policies that are friendly to business/investments, as well as improved governance/anti-corruption/ESG (environmental, social, and governance) standards that have been encouraged and even required by some regulators worldwide as part of the requirements/criteria before investing/locating in the country,” he added. (PNA)
