As far as analysts are concerned, the foreign investment outlook for the Philippines is improving and should result in more investments, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
LOWER INTEREST RATES will help drive the entry of more foreign direct and portfolio investments into the Philippines, analysts said.
“The outlook for foreign direct investment (FDI) and foreign portfolio investment (FPI) in the Philippines appears promising, with current trends suggesting the country could meet or potentially exceed the Bangko Sentral ng Pilipinas’ (BSP) targets,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
The BSP expects to record FDI net inflows of $9.5 billion this year. For foreign portfolio investments, it forecasts $3.1 billion in net inflows by yearend.
“The BSP’s forecast for the year sounds reasonable, as it wouldn’t be too far a stretch, with that sort of level of annual FDI coming into the Philippines almost consistently over this period, barring the coronavirus-hit year in 2020,” Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said in an e-mail.
In the January-to-May period, FDI net inflows jumped by 15.8% year on year to $4.024 billion, data from the BSP showed.
Meanwhile, short-term foreign investments yielded a net inflow of $1.46 billion in the January-July period, surging from the $157.3-million net inflows in the same period a year ago.
FDIs are considered long-term investments, while portfolio investments or “hot money” are seen as more fickle due to the ease by which these funds enter and leave the economy.
Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the BSP’s investment targets are doable amid easing interest rates.
“Offering attractive rates will be the key. All around will be declining key rates, thus, offering sensible investments now will lock in gains for prospective investors. I would like to believe that there is time,” he added.
Mr. Roces said the further reduction in policy rates this year and next year “should stimulate investment activity, particularly for FDI, by making borrowing more attractive.”
At its August meeting, the Monetary Board cut rates for the first time in nearly four years or since November 2020. It reduced borrowing costs by 25 basis points (bps), bringing the benchmark rate to 6.25% from the previous over 17-year high of 6.5%.
The central bank could also deliver another 25-bp rate hike in the fourth quarter, BSP Governor Eli M. Remolona, Jr. said earlier.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you agree with the findings of the economic analysts pointing to improving foreign investment outlook for the nation?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
+++++
Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco
Author Carlo Carrasco 