The Philippine economy has become more investment-led, as capital formation, foreign direct investments, and portfolio investments showed sustained growth this year, the Finance Department said Monday.
Finance Undersecretary Gil Beltran said as a percentage of the gross domestic product, capital formation”•a most comprehensive measure of investment”•rose from 24.4 percent in 2016 to 27.4 percent in the first half of 2018.
Capital formation is one of the foremost determinants of future growth, in addition to employment and factor productivity, he said.
“Capital formation, which is tracked by the national income accounts issued by the Philippine Statistics Authority, shows a real growth of 9.4 percent in 2017 and 16.4 percent during the first half of 2018,”
Beltran, the DoF’s chief economist, said in an economic bulletin.
“These growth rates are higher than real GDP growth of 6.7 percent [in 2017] and 6.3 percent [in the first half 2018], respectively,” he said.
He said of the major components of investments”•fixed capital which consists of construction and durable equipment”•grew 9.5 percent in 2017 and 14.8 percent in 2018.
Another measure of investment is foreign direct investment and portfolio investments tracked by the balance of payments account which is released periodically by the Bangko Sentral ng Pilipinas. These measure the amount of investments from foreign investors.
Data showed that FDIs increased 21.4 percent to $10.05 billion in 2017 and 48.9 percent in the first five months of 2018. As percentage of GDP, this showed an increase from 2.7 percent in 2016 to 3.7 percent in 2018.