Record-breaking: PH foreign direct investment reached USD6.2b in 2014

Most were geared for the manufacturing sector.

The Philippines continues to see growth in its economy, and is now enjoying a very strong external liquidity position.

According to a report by DBS, total foreign direct investment (FDI) reached a record-high USD 6.2bn in 2014, equivalent to about 2.2% of total GDP.

Around 60% of FDI projects approved in 2014 were geared for the manufacturing sector. The revitalisation of the manufacturing sector has been one of the key positives for the Philippines in the past couple of years. The economy has been labeled as overly dependent on its services sector.

Robust growth in the construction sector since 2011 has also led to some concerns that the economy may overheat.

DBS believes that total FDI is likely to rise again this year. Some policy changes to attract more FDI are currently being discussed. Among others, these may include new tax incentives for targeted sectors and revision to the negative investment list. On the latter, progress has been painfully slow. Still, a close monitoring is warranted for this year, especially ahead of the presidential elections in 2016.

Coupled with robust foreign remittances, the economy’s external liquidity position is indeed very strong.