BSP may revise 2014 FDI target

MANILA, Philippines - The Bangko Sentral ng Pilipinas may revise its foreign direct investments target for this year following strong inflows in 2013.

“We are looking at higher FDIs for 2014,” BSP Deputy Governor Diwa C. Guinigundo said in a briefing.

The central bank expects net FDI inflows to reach $2.6 billion this year.

Guinigundo said this assumption may be adjusted upward in April or May.

“There are push and pull factors. When you say push factors this is the shock coming from advanced economies where you get the source of the investments,” Guinigundo said.

“But at the same time it is possible that the pull factors – again the macroeconomy of the Philippines – could be more dominant in terms of their decision point,” he added.

The improving advanced economies may cause partial sell-offs of emerging market assets but the economic performance of the Philippines is seen tempering this sentiment.

Guinigundo cited Philippine economic growth which hit 7.2 percent last year, a stable inflation which averaged three percent in 2013, and a good external payments position.

“The fiscal position also continues to improve, the banking system is sound and stable, structural reforms are being put in place,” Guinigundo said.

“These are the pull factors that will define the kind of optimism of our foreign direct investments,” he added.

FDI grew 20 percent to $3.86 billion last year from $3.215 billion in 2012. The year-end figure surpassed the BSP’s $2.1-billion target for 2013.

The increase in FDI was attributed by the central bank to the country’s sound macroeconomic fundamentals.