Finance Secretary Carlos Dominguez III said Tuesday the Philippines’ solid macroeconomic fundamentals will continue to attract more foreign direct investments despite concerns of some quarters over the seemingly worsening human rights violations in the country.
Dominguez said in a news briefing there were “always two sides to the story…. You know there’s a lot of talk about this… how will it affect I am not sure,” he said.
Dominguez said a proof that the country continued to lure foreign investors was the all-time record posted by the Philippine Stock Exchange index in the past few days.
He also said Morgan Stanley recently recommended the Philippines as the top pick in Southeast Asia, given the earnings growth in the country and valuable action on infrastructure.
“The PSEi increased by 19 percent since the start of the year,” he said. Dominguez said people continued to believe and support the administration’s policies.
Dominguez also downplayed any potential impact on investors’ sentiment of the measly P1,000 budget endorsed by lawmakers for the Commission on Human Rights.
“The Senate put it back, so I don’t know what will come out in the end, but it seems that democracy is working,” he said.
“Well fortunately, we are not part of the bicam [bicameral conference committee] but the administration presented a budget of over P600 million for the CHR… You know I am really confident that the legislature will come to a rational agreement on this budget,” Dominguez said.
The European Chamber of Commerce of the Philippines expressed concern last week over the House of Representatives’ endorsement of a P1,000 budget for CHR.
ECCP president Guenter Taus said the move would not send a good message to foreign investors.
Taus said human rights was a key concern for investors and this would remain until the commission’s annual allocation was sorted out.
Opposition senators pledged to block the P1,000 budget for the CHR, which repeatedly criticized President Duterte’s bloody war on drugs. The House and the Senate are set to reconcile their respective versions of the budget before the President can sign it into law.
Budget Secretary Benjamin Diokno expressed hope that lawmakers from both chambers of Congress would resolve the budget standoff soon.
Latest data from Bangko Sentral ng Pilipinas showed that the net inflow of foreign direct investments surged 182.7 percent in June to $674 million from $238 million a year ago. However, net inflows in the first half declined 4 percent to $3.6 billion from $4.2 billion a year ago, dragged down by the 90.3-percent decrease in net equity capital to $141 million from $1.4 billion.
Equity capital infusions in the first six months came mostly from the US, Japan, Singapore, Hong Kong and Taiwan. These were invested in real estate; financial and insurance; manufacturing; electricity, gas, steam and air-conditioning supply; and wholesale and retail trade.
Bangko Sentral raised the FDI net inflow target this year to $8 billion from the previous estimate of $7 billion. Net FDI inflows reached $7.9 billion in 2016, up from $5.72 billion in 2015.