Foreign investments expected to rebound

An economist remains optimistic about the rebound of foreign direct investments (FDIs) to the Philippines despite the 23.2 percent decline in net FDIs to $9.2 billion in 2022 compared to the previous year, according to a report by Philippine News Agency.

Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael Ricafort noted that this decline was likely caused by upticks in interest rates overseas and elevated inflation rates globally, which have made investors wary. However, as the Philippine economy continues to recover, Ricafort believes that net FDIs could still be sustained at one of the highest levels since the pandemic began.

Ricafort cited the Philippine economy's expected faster growth rate in the region, demographics, improved diplomatic relations with developed countries, and sources of foreign investments as positive indicators for the future. He also mentioned the impact of reopening China and investment commitments during the foreign trips of members of the Marcos administration.

Furthermore, the passage of reform measures, particularly the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, which reduces the corporate income tax and provides greater investment certainty, would continue to attract more decisive FDIs to the country, Ricafort added.

Despite the decline in net FDIs in 2022, Ricafort's analysis shows that the future remains promising for the Philippine economy and its efforts to attract more foreign investments.