Philippines becomes more investment-driven economy

MANILA (Xinhua) – The Philippines’ economy has become more investment-led in 2018, the chief economist of the Department of Finance said yesterday, indicating that the country is enjoying the confidence of foreign investors.

“As per cent of gross domestic product (GDP), the capital formation which is the most comprehensive measure of investment, rose from 24.4 per cent in 2016 to 25.1 per cent in 2017 and further to 27.0 per cent in 2018,” said Finance Undersecretary Gil Beltran, the department’s chief economist.

Beltran said “capital formation, which is one of the foremost determinants of future growth, in addition to employment and factor productivity,” showed a real growth of 9.4 per cent in 2017 and 13.9 per cent 2018.

“These growth rates compare favorably with the 20-year average of 6.7 per cent,” Beltran added.

Of the major components of investments, “fixed capital which consists of construction and durable equipment grew by 9.5 per cent in 2017 and 15.6 per cent in 2018,” he said.

Philippine Finance Secretary Carlos Dominguez said the USD20.1 billion in net foreign direct investments (FDIs) over the two-year period of 2017 and 2018 remained “unprecedented” and showed that the upward trajectory of FDI inflows is sustainable in the future.

Data from Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, showed that for 2018, net investments of equity capital were lower at USD2.3 billion compared to USD3.4 billion recorded in 2017. The bulk of equity capital placements in 2018 were sourced mainly from Singapore, the United States, Japan and China.