$8B doable: BSP bares the real deal with the FDI hullabaloo
Last year’s jackpot should not discredit this year’s steady inflows.
The Bangko Sentral ng Pilipinas (BSP) has stepped up to clarify issues surrounding the country’s foreign investment haul, saying that pundits shouldn’t be too alarmed that the tally has dropped from a year ago.
In a statement, the central bank refuted claims that the Philippines is losing its appeal as a destination for foreign direct investments (FDI) as claimed by Senator Franklin Drilon.
While it is true that FDIs are down by 16.5% to $3.9 billion as of July from a year ago, the central bank said the figure simply reflects a one-time, big-time investment that entered the Philippines in 2016.
“The lower net inflows were due to the 90.3 percent decline in net equity capital to $141 million from US$1.4 billion a year ago. Data showed that the significant inflow noted last year was attributed to a large investment flow that went to the financial and insurance industry,” the BSP said in a statement.
In fact, investor sentiment is so strong that the central bank still expects $8 billion in foreign funds to enter the country for 2017, which would match last year’s record high.
“Prospects for inward flows of FDI into the country continue to be favorable as both “push” (e.g., subdued global economic growth) and, more importantly, “pull” (e.g., sustained robust macroeconomic performance and investment grade status) factors remain,” the BSP added.
Do not worry — take it from the central bank itself.