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Balisacan highlights economic growth despite FDI downturn

National Economic and Development Authority Secretary Arsenio Balisacan said that foreign direct investments (FDIs) are showing an upward trend.

However, data from the Bangko Sentral ng Pilipinas (BSP) present a contrasting view, with FDIs marking a second consecutive year of decline.

Speaking at the 12th Arangkada Philippines Forum held on October 25.

Balisacan emphasized the growth of foreign direct investment compared to historical averages.

According to BSP data, FDIs amounted to just $4.66 billion in the first seven months of 2023, reflecting a 14.7% drop compared to the $5.47 billion recorded during the same period in 2022.

Additionally, FDIs for 2022 reached only $9.37 billion, falling short of the $11.98 billion reported in 2021—a year that witnessed substantial growth from the $6.82 billion in 2020, during the peak of the COVID-19 pandemic.

Despite global economic uncertainties, Balisacan highlighted the Philippines’ robust economic performance, with a 5.3% growth in the first half of this year, ranking among the fastest in the region.

He expressed confidence in the country’s promising economic outlook for 2023 and 2024, though he acknowledged the presence of both domestic and external risks.

He identified rising inflation and public underspending as potential challenges.

Inflation has been on the rise, especially in August and September, and factors such as increasing rice prices and transport fares leave the trajectory of inflation in October uncertain.

Balisacan stressed the importance of policy reforms to improve the business environment, emphasizing the need to create a favorable climate supported by enabling policies and regulations.

Among these reforms, he highlighted an overhaul of the Public-Private Partnership (PPP) framework and revisions to the implementing rules and regulations of the Build-Operate-Transfer Law, aimed at making the Philippines more appealing to investors.

Balisacan also pointed to the administration’s ambitious Build-Better-More program, encompassing 197 flagship infrastructure projects valued at around P8.74 trillion. These projects span various sectors, including physical and digital connectivity, water resources, and agriculture.

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