Foreign direct investments to rise next year – Domingo

MANILA, Philippines - Foreign direct investments (FDI) in the country are expected to continue its upward trend next year amid expectations of sustained positive economic conditions, the Department of Trade and Industry (DTI) said.

“The FDIs have fluctuations, but definitely there would be a strong upward trend,” Trade Secretary Gregory Domingo told reporters.

Latest data from the Bangko Sentral ng Pilipinas showed that FDI inflows for the January to September period, which reached $4.88 billion this year, have already breached the central bank’s target of $4.44 billion for the entire year and last year’s total inflows of $3.9 billion.

“I am bullish because of all the positive news that are coming out,” Domingo said.

He noted that the reduction of oil prices in the world market is very beneficial for the Philippines as oil forms a big part of prices of consumer goods.

With oil prices on a decline, consumption spending is seen to get a big boost.

Domingo said the approval of the Philippines’ application to the European Union’s Generalized System of Preferences Plus, which would allow the country to export more than 6,200 goods to the bloc at zero duty, would also be beneficial in terms of higher exports.

The Philippines’ hosting of the Asia Pacific Economic Cooperation Summit as well as the visit of Pope Francis next year, are likewise expected to allow the country to attract more investments as it is able to showcase what opportunities are available here.

Apart from favorable economic conditions and other positive developments that would make the country a more attractive location to do business, FDI inflows are expected to continue to rise as firms that construct new facilities are seen to bring in investments to other parts of the supply chain.

Among the sectors in which gaps are seen in the supply chain here are in the tool and die, and automotive industries given the lack of plastic moulding and large parts.

“We are attracting big companies to come here and set up facilities. Once they enter the country, they also bring with them other parts of the supply chain,” Domingo said.

“It is a virtuous cycle. As that happens, it further strengthens our position as a manufacturing hub. Once we fill the gaps in the supply chain, we become more efficient,” he noted.