Dominguez: Supposed drop in FDIs misleading

Concerns about the supposed drop in foreign investment (FDI) is unfounded and misleading, Finance Secretary Carlos Dominguez III said yesterday, citing two recent capital infusions with a combined value of $2.3 billion.

These investments, the Cabinet official noted, are the $1 billion investment by Japan Tobacco International in acquiring the assets of cigarette maker Mighty Corporation, and the $1.3 billion deal between the Philippines’ Energy Development Corporation and a consortium of foreign investors backed by Macquarie Infrastructure and Real Assets and Arran Investment Pte. Ltd., an affiliate of Singaporean sovereign wealth fund GIC.

Some quarters pointing to this alleged drop in FDIs have failed to present the complete picture, omitting reinvestments that should have been included in assessing FDI data, Dominguez said.

“They have not captured the entire data, and reinvestments by foreign companies in the Philippines have actually been quite healthy,” Dominguez said at a recent forum on the Philippine economy in Washington DC, the Department of Finance said yesterday.

The department noted that Japanese investment house Nomura has issued a report saying it expects the Philippines to remain a magnet for foreign investments, dispelling misleading claims that FDIs fell by 90.3 percent year-on-year in the first half of 2017.

Nomura supposedly noted that yearon-year FDI data had been distorted by the base effect created by the purchase of a large stake in Security Bank Corp. by the Bank of Tokyo-Mitsubishi UFJ last year, involving a surge in capital inflows of about $2 billion in April 2016.

"After omitting this base effect, Nomura estimated that total FDI inflows went up by about 65 percent year-on-year in the first half of 2017," the Finance department said.

(GMA News Online)