AN economist is optimistic about the rebound of foreign direct investments (FDIs) to the Philippines given the continued recovery of the domestic economy.
The Bangko Sentral ng Pilipinas (BSP) reported on Friday the 23.2-percent decline of net FDIs to $9.2 billion in 2022 compared to the previous year, and 76.2-percent drop of the net inflows in December 2022 to $634 million, both of which were traced to higher base effects.
In a report, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said upticks of interest rates overseas, along with the general trend of elevated inflation rate globally, likely contributed to investors’ worries, thus the drop of inflows going to the Philippines.
But as the economy continues to recover, Ricafort said “net FDIs could still be sustained among the highest since the pandemic started.”
Philippine economy still expected to have one of the faster growth rates in the region,” he said, citing also the demographics, the impact of the reopening of China and the investment commitments during the foreign trips of members of the Marcos administration.
Ricafort said the improved diplomatic relations with developed countries and sources of foreign investments also bode well for the Philippines.
“Furthermore, the passage of reform measures in recent months, especially the Create (Corporate Recovery and Tax Incentives for Enterprises) law that reduces the corporate income tax by at least 5 percentage points (from 30 percent) retroactive July 2020 and providing greater certainty on investments, would also continue to help attract more FDIs to be more decisive and locate in the country,” he added.