Foreign direct investments (FDI), the kind that stays invested for the long haul and generates employment for Filipinos, is seen aggregating USD 500 million this year to USD9.5 billion in latest calculations done by the Bangko Sentral ng Pilipinas (BSP).
This was bared by BSP deputy governor Francisco G. Dakila Jr. who briefed Japanese regulators and investors in Tokyo that the original forecast revealed in the first quarter this year amounted to only USD 9 billion.
According to Dakila, the second-quarter FDI forecast was made for purposes of upgrading forecasts in the second quarter balance of payments.
“We were initially projecting a USD9 billion net FDI position in the first quarter. We have upgraded that to USD9.5 billion. And actually, this is still very conservative, as in 2023, we have already achieved USD8.9 billion,” Dakila said.
He explained this was premised on both push and pull considerations.
According to Dakila, the BSP raised the net FDI outlook mainly on the back of positive global economic growth prospects and the government’s commitment to attain its growth targets, such as continued economic expansion averaging six percent to as much as seven percent in terms of the gross domestic product (GDP) while ensuring price stability no higher than four percent in terms of inflation this year.
Foreign direct investment aggregated 90 percent higher in January this year to USD907 million, then up another 29 percent in February to USD1.4 billion and 42 percent more to USD686 million in March.
Foreign direct investments fell more than six percent last year to only USD8.9 billion, the second such decline from the year before.
Japan, from 2019 to February 2024, proved the second largest source of foreign direct investments, contributing an average share of 28.9 percent to net equity other than reinvestment of earnings during the period, next to the 39.1 percent share from economies in the Association of Southeast Asian Nations (ASEAN) region.
“We are very happy that Japan is both recognizing the potential of the country and supporting Philippine economic growth,” said Deputy Governor Dakila.
Dakila forms part of a Philippine delegation seeking greater Japanese participation in the country’s investments and growth story.
He was with Finance Secretary Ralph G. Recto who told the Japanese audience that the Philippines, where 806 Japanese businesses are entrenched across economic zones, has “all the makings of a tiger economy.”
Forming part of the delegation were Budget secretary Amenah F. Pangandaman, special assistant to the President for investments and economic affairs Frederick D. Go , Nomura Philippines president and country head Miguel Antonio L. Ozaeta, Morgan Stanley MUFG Securities managing director and principal global economist Chiwoong Lee
