Foreign chambers concede huge FDI drop this year

MANILA, Philippines - Foreign business groups have conceded hopes the country would achieve higher net foreign direct investments (FDI) this year, acknowledging it would fall short from last year after inflows declined 35 percent in seven months.

European Chamber of Commerce of the Philippines vice president Henry Schumacher told The STAR the country’s net FDI in 2015 would likely see a big drop from last year’s $6.2 billion despite growth expected in the August to December period.

“FDI will still grow but will be much lower than the 2014 achievement,” Schumacher said. “The reason is that competing countries for FDI have become more competitive.”

The Bangko Sentral ng Pilipinas (BSP) on Monday reported that foreign direct investments registered a net inflow of $2.48 billion in the first seven months of the year, 35 percent lower than the $3.82 billion in the same period in 2014.

Net FDI for July, however, grew 1.55 percent to $458 million from $451 million a year ago.

Prior to the release of the BSP data, the Joint Foreign Chambers (JFC) said it is optimistic the country’s net FDI would pick up in the second half of the year as investors regain confidence along with easing port congestion problems.

The JFC likewise expressed confidence net FDI could at least match last year’s level.

American Chamber of Commerce of the Philippines senior advisor John Forbes told The STAR the country could still reach the $6-billion level if July’s $458 million inflow is maintained in the succeeding months.

Forbes, however, said the Philippines won’t be catching up with Vietnam soon in terms of net FDI.

Vietnam ranked fifth within the Asean-6 in terms of net FDI last year with $6.6 billion. The Philippines was sixth with its record year of $6.2 billion.