MANILA – Foreign businessmen remain confident about doing business in the Philippines even despite the double-digit drop in foreign direct investments (FDIs) in the first semester of the year, the National Economic and Development Authority (NEDA) said Tuesday.
In an emailed statement, the NEDA downplayed the 14-percent drop in FDIs in the first six months of the year.
“Among the reasons for the positive outlook of business, according to the BES (Business Expectations Survey), are the uptick in the consumer demand during the holiday, harvest and milling seasons, and the government’s massive infrastructure program,” it said.
BES is a quarterly survey conducted by the Bangko Sentral ng Pilipinas (BSP), taking into account the outlook of respondents from the top corporations in the Philippines.
Over the weekend, Senate Minority Leader Franklin Drilon expressed “serious” concerns about the capability of the government to attract new foreign investors.
Data from the BSP showed FDI declined by 14 percent to $3.6 billion in the first semester of 2017 from $4.2 billion a year earlier.
Foreign equity placements, which make up a huge percentage of the FDIs, saw a 90.3-percent drop to $141 million from $1.448 billion.
“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 said on Saturday.
NEDA undersecretary and officer-in-charge Rolando Tungpalan said that foreign equity placements do not make up the entire FDI.
“While the data on equity placements serve as a gauge of new FDI entry and overall investor confidence, the figure is not complete. The figure does not show the total inward investments made by foreign investors in the country,” he said.
Aside from equity placements, the FDI consists of reinvested earnings and intra-company loans.
Recently, foreign business groups raised concerns about the Philippine investment climate especially with the human rights situation in the country.
Just last month, the European Chamber of Commerce of the Philippines (ECCP) said the Philippines was not sending the right message to investors, especially when the House of Representatives downsized the 2018 budget of the Commission on Human Rights to P1,000.
The House of Representatives Committee on Appropriations has since restored the CHR budget of P678 million.
Also over the weekend, the Human Rights Watch (HRW) said the situation could prompt economic sanctions from its United Nations peers.
Members of the government economic team are scheduled to hold a roadshow in New York this week to promote the Philippine infrastructure program to prospective investors in the United States.
Among those joining the Philippine delegation are Socioeconomic Planning secretary Ernesto Pernia, Budget secretary Benjamin Diokno, Finance secretary Carlos Dominguez III, Foreign Affairs secretary Alan Peter Cayetano, and Executive Secretary Salvador Medialdea.
“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 in our country,” he added. (GMA News)