Gov’t urged to review investment policies

MANILA, Philippines - The Philippine government should review its investment policies if it wants to attract more foreign funds to help sustain economic growth, Singapore-based DBS Bank Ltd. said.

“A growing gap between approved and realized FDI (foreign direct investments) underscores the need for investment policy reviews,” DBS said in a research note.

The bank said that despite over $6 billion in approved FDIs in 2012, only $2 billion were realized.

This gap was almost the same in 2011, when approved FDIs totaled $6 billion, while actual investments only amounted to below $2 billion, the report said.

“More FDI is crucial to support the ongoing infrastructure overhaul. Total FDI into the economy remains relatively small,” the bank said.

“The last available data out of 2012 has it at about $2 billion in the year. While it is likely to have risen to about $2.5 billion in 2013, it remains to be just about one percent of GDP (gross domestic product),” it added.

Latest central bank data showed net FDI inflows went up 36.6 percent to $3.648 billion as of November 2013 from the same period in 2012. The amount was above the Bangko Sentral ng Pilipinas’ assumption of $2.1 billion for 2013.

The country has been working on shoring up more foreign direct investments to support its growing economy and sustain the strong 7.2 percent expansion seen in 2013.

“This week, the Finance Secretary hints that a review of foreign investment limits is still on the agenda. Changes to the Build-Operate-Transfer scheme are also in the offing, in an attempt to improve efficiency in the public-private partnership projects,” the report said.

“The government is strongly committed to provide favorable business environment to sustain the six to seven percent GDP growth momentum in the medium-term,” it added.