Despite big jump in November inflow
MANILA, Philippines - Despite rising foreign direct investments, the research arm of Metropolitan Bank & Trust Co. said the country remains a laggard among Southeast Asian countries in terms of annual average FDI.
The country’s net FDI inflow rose to $286 million in November, bringing the 11-month figure to $3.648 billion, or 37 percent higher than in the same period in 2012.
“This may be seen as an improvement from five years ago as the YTD (year to date) figure breached the 12-year average of FDI flows which is near the $2-billion mark,” Metrobank Research said.
However, it continued: “The need for higher FDIs cannot be further emphasized especially when we look at the annual figures of our ASEAN (Association of Southeast Asian Nation) peers.”
The research unit pointed out the Philippines’ annual average FDI from 2000 to 2012 amounted to $1.547 billion, far below Thailand’s $7.223 billion and Indonesia’s $6.208 billion.
The country was also lagging behind Malaysia, whose annual average FDI in the 12 years to 2012 summed up to $5.885 billion, and Vietnam ($4.545 billion).
“Robust foreign investment has been supporting the growth in other Asian economies – generating much-needed employment, raising incomes, increasing economic activity, and deepening technologies,” Metrobank Research said.
“The lack of infrastructure and the failure to attract FDIs have long been seen as a critical growth constraint to the domestic economy, but the government has been firm in its commitment to improve and develop the country’s infrastructure system,” the research unit said.
The central bank expects net FDI inflows hitting $2.1 billion in 2013, a figure already surpassed by the $3.648 billion recorded as of November.
“The remarkable expansions in investment spending has indeed been a major push to GDP (gross domestic product) growth in 2013, which when sustained would lay the foundation for a more sustainable and inclusive growth moving forward,” Metrobank Research said.
The economy expanded by 7.2 percent in 2013, matched by a stable inflation which averaged three percent.
The government hopes to grow the economy by 6.5 to 7.5 percent this year, while inflation is expected to remain within three to five percent.