Manila Bulletin

PH long-term prospects re­main pos­i­tive — DOF

- By CHINO S. LEYCO Business · Finance · Investing · Philippines · Bangko Sentral ng Pilipinas · Nigeria · Commonwealth of Nations · Philippines Department of Finance

The quick recovery of for­eign di­rect in­vest­ments (FDIs) fol­low­ing the strict lock­downs sig­nalled in­vestors’ fa­vor­able long-term prospects for the Philip­pines, the Depart­ment of Fi­nance (DOF) said.

Based on Fi­nance Un­der­sec­re­tary Gil S. Beltan’s lat­est eco­nomic bul­letin, the coun­try’s FDIs sus­tained its an­nual growth from May to July this year, an in­di­ca­tion that long-term prospects re­main pos­i­tive in the eyes of in­vestors.

Data from the Bangko Sen­tral ng Pilip­inas (BSP) showed that FDIs grew for three con­sec­u­tive months with 39.1 per­cent in May, 7.1 per­cent in June and 35.1 per­cent in July.

The BSP at­trib­uted the steady climb on in­vestors’ im­prov­ing sen­ti­ment amid eas­ing of con­tain­ment mea­sures, and some signs of grad­ual im­prove­ments in eco­nomic ac­tiv­ity in the coun­try.

Like­wise, FDI in­flows im­proved month-on-month by 28 per­cent in May, 19.6 per­cent in June and 65 per­cent in July.

“Strict quar­an­tine mea­sures im­ple­mented in the fi­nal weeks of the first quar­ter may have [only] put FDI in­flows tem­po­rar­ily on hold… long-term prospects re­main pos­i­tive,” Bel­tran said in a re­port sub­mit­ted to Fi­nance Sec­re­tary

Car­los G. Dominguez III.

How­ever, the to­tal FDIs of $3.80 bil­lion in Jan­uary to July re­mained 11 per­cent lower com­pared with $4.26 bil­lion in the same pe­riod last year.

Year-on-year de­creases were in rein­vest­ment of earn­ings and net debt in­stru­ments of 20.9 per­cent and 27.1 per­cent re­spec­tively, which mit­i­gated the 111.1 per­cent growth in net equity cap­i­tal in­vest­ments for the pe­riod.

“Mov­ing for­ward, sus­tain­ing in­vest­ment-in­cen­tiviz­ing ac­tiv­i­ties such as mak­ing do­ing busi­ness eas­ier and con­tin­u­ing to in­vest in in­fra­struc­ture will be key to at­tract­ing more in­vest­ment into the coun­try,” Bel­tran said.

The fi­nance of­fi­cial also re­it­er­ated the need to pass the much­needed leg­isla­tive re­forms be­ing ini­ti­ated by the DOF to fuel and en­cour­age more for­eign in­vest­ments.

These mea­sures are the Cor­po­rate Recovery and Tax In­cen­tives for En­ter­prises Act (CRE­ATE) bill, Fi­nan­cial In­sti­tu­tions Strate­gic Trans­fer (FIST) bill, and Pas­sive In­come and Fi­nan­cial In­ter­me­di­ary Tax­a­tion Act (PIFITA).

Amend­ments to the Com­mon­wealth-era Pub­lic Ser­vice Act and the Re­tail Trade Lib­er­al­iza­tion Act are like­wise im­por­tant to en­tice in­vestors, which in turn, will ex­pand con­sumer choices and the pool of em­ploy­ers, Bel­tran said.

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