ING sees more FDI inflows

MANILA, Philippines - More foreign direct investments (FDIs) are expected to enter the Philippines as the country remains in a “sweet spot” for investments, ING Financial Markets economist Joey Cuyegkeng said.

He said even countries such as Brunei, Indonesia, Malaysia, and even the Middle East and North Africa nations have shown interest to invest here.

“That is not a measly amount, running in billions of US dollars,” Cuyegkeng said during the ING Financial Markets forum yesterday.

The ING economist said the investments will be more effective if these go to major infrastructure projects especially airports and power.

“Then the capacity of the Philippine economy to expand over six percent will grow in a big way,” Cuyegkeng said.

Adding strength in the economy this year and next is the 2016 national elections, which unleashes more liquidity in the system.

The economist said, however, that since foreign investors are concerned about the uncertainty of national leadership, a huge bounce or surge of the economy could well occur after the elections.

As of November last year, FDI inflows reached over $6 billion or three times the annual average for the past few years.

ING said it remains bullish towards the Philippine economy this year and the next.

This as global oil prices are stabilizing and may return to the $80 a barrel level towards the end of 2015 to early 2016.

But it will have a muted impact on the Philippine economy, taking into consideration various factors including weakening peso, strong revenue flows from overseas Filipino remittances and business process outsourcing.

“The Philippines will sustain its sweet spot in the next few years,” Cuyegkeng said.

Gross domestic product (GDP) this year is forecast to rise to 6.7 percent and further to seven percent in 2016. Government targets seven to eight percent in both periods.