INVESTMENTS DROPPED: REPORT

BSP data show foreign direct investments (FDI) decelerating, says Drilon

Senate Minority Leader Franklin Drilon has expressed concern over the huge drop in new foreign investments in the first half of this year.

Citing data from the Bangko Sentral ng Pilipinas, Drilon said foreign direct investments (FDI) shows a significant deceleration in the influx of new investments with foreign equity placements other than reinvestments of earnings decreased by 90.3 percent during the first six months of 2017 ($141 million) in relation to the same period in 2016 (US$1.448 billion).

At the hearing on National Economic and Development Authority’s (Neda) proposed 2018 budget, Drilon asked why the amount of new foreign invest- ments has declined this year.

“We note from the reports that there is a deceleration in new investment. This is very alarming. Why such a huge drop? Is this an indication of anything?” Drilon asked.

Senate committee on finance chair Loren Legarda said Neda has told the panel that the 90.3 percent plunge in FDI was caused by some restrictions.

Even Legarda admitted that she does not agree on the answer, “I am told that it is because of certain restrictions. I do not agree with that answer because these restrictions were already there when there was an increase.”

Drilon said the Neda has a lot to explain about this huge drop in new foreign investments, saying this is “reflective of confidence of foreign business on our country.”

“If we are to attract new foreign investment, then it is about time that we take a serious look at how things are going on in our country, because new investment would not come in unless we are able to raise the investors’ confidence level on our country,” Drilon said.

Citing a study conducted by The 2018 Asean Business Outlook Survey published by the American Chamber of Commerce in Singapore and the United States Chamber of Commerce, Drilon said among the companies surveyed, only 22 percent chose the Philippines as a possible expansion location, with Vietnam topping the list (34 percent).

The Philippines ranked sixth lagging behind Vietnam, Myanmar (29 percent), Indonesia (29 percent) Thailand (26 percent), and Cambodia (23 percent). /