The central bank of Philippine, Bangko Sentral ng Pilipinas (BSP), reported a comeback wave from foreign investors earlier today. Upon the surge of foreign investment, Philippine hopes for faster economic recovery.
Philippine: foreign investment peaks in July
BSP reported foreign investments has been in a constant incline since the second quarter of 2020. The bank revealed through a report earlier today that foreign investment reached its peak for the concurrent year with $797 million in July.
Noted from CNN Philippine, the country recorded a 35.2% surge in foreign direct investments (FDI) from $590 million net inflow in July 2019. Despite the surging amount of FDI, the number is still comparably low to the same period last year. With a total $3.8 billion of FDI for the past seven months, Philippine suffers for around 11% lower influx from $4.3 billion last year.
BSP added that Philippine’s loosening lockdown rules may have lured more foreign investors back in. In addition, the country has been showing a slow but constant improvement in economic activity.
Debt triples net inflow
Accordingly, debt placements ballooned nearly the triple amount of the net inflow. Around $643 million is accumulated for July alone, which equal to 60.1% jump of debt. Intercompany borrowings are suspected to cause the swelling in debts, as foreign investors inject more funds in local subsidiaries they are related to.
Incoming investment from developed countries, more job opportunities
BSP noted that capital came from developed countries namely Japan, China and the United States. Most investments go to construction, real estate, wholesale, retail trade, and manufacturing. With more foreign investments coming in, the country expects for more job opportunities to its citizens.
Philippine’s economy has been in a stressful situation. The country relies a lot on its travel and tourism. Unfortunately, the pandemic forcefully shut down both sectors. Hence, Philippine is hoping the incoming foreign investors could help elevate and fasten the country’s economic recovery.