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By Jenina P. Ibáñez, Reporter
FOREIGN DIRECT INVESTMENT (FDI) in the Philippines increased by nearly a third in 2020, a stark contrast to the collapse of global FDI amid the 2019 coronavirus disease (COVID-19) pandemic, according to preliminary estimates from the Conference. of the United Nations on Trade and Commerce. Development (UNCTAD).
In its latest investment trend monitor released on Monday, UNCTAD said the Philippines opposed the trend, as FDI inflows increased 29% to $ 6.4 billion in 2020 from $ 5 billion in 2019.
In contrast, global FDI plunged 42% to around $ 859 billion last year, mainly due to declining investment among developed countries. FDI in Southeast Asia declined last year by 31% to $ 107 billion after flows to major recipients Singapore and Indonesia slowed.
“IED FloridaFlows to developed countries fell dramatically by 69% to values last seen almost 25 years ago … At an estimated $ 229 billion, inflows into developed economies were only a third of the lowest point after the global financial crisis in 2009 (at $ 714 billion). “UNCTAD said.
China was the largest recipient of FDI with $ 163 billion in inflows, followed by the United States with $ 134 billion.
UNCTAD investment trends monitor annual estimates to beFigures based on data from partial years.
The latest data from Bangko Sentral ng Pilipinas showed that FDI flows to the Philippines fell by around 10% to $ 5.255 billion in the first 10 months of 2020. The central bank set a target of $ 5.6 billion in total FDI for year.
UnionBank Philippines chief economist Ruben Carlo O. Asunción called UNCTAD’s assessment of FDI growth in the Philippines against an overall decline in Southeast Asia as a “surprise.”
He noted in an email that while he does not have the data, outsourcing investments in the Philippines grew during and after the severe acute respiratory syndrome (SARS) epidemic in 2003-2004.
“I suspect this may be the case here. Many global companies may be looking to cut costs and one way is to outsource, “he said.
The president of the European Chamber of Commerce of the Philippines, Nabil Francis, said in a moving message that the assessment demonstrates the country’s ability to attract investment amid the pandemic.
“We therefore urge the Philippine government to maintain momentum through the passage of key economic reforms,” he said, noting the amendments to the Public Services Law, the Foreign Investment Law and the Retail Trade Liberalization Law. .
“The Philippines is among the most restrictive countries in the world to foreign direct investment. Foreign investment reacts positively to the liberalization of foreign restrictions. ”
WEAK PERSPECTIVES
In the report, UNCTAD said prospects for global FDI are expected to remain weak this year.
“Although the global economy is expected to begin a faltering and uneven recovery in 2021 and GDP growth, gross fixed capital formation and trade are expected to resume growth, investors are likely to remain cautious about committing capital in new productive assets abroad, “he said. .
Potential increases in FDI flows, UNCTAD added, would be based on cross-border mergers and acquisitions, especially in healthcare and technology, rather than new investments in productive assets.
“Risks related to the latest wave of the pandemic, the pace of implementation of vaccination programs and economic support packages, the fragile macroeconomic situations in major emerging markets and the uncertainty about the global political environment for investment will continue to affect FDI in 2021 ”. the report said.
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