MANILA - Senate Minority Leader Franklin Drilon has expressed "serious concerns" over the decline in foreign investments in the first half of the year, saying it reflected a drop in investor confidence.
At a recent Senate hearing on the proposed budget of the National Economic Development Authority (NEDA) Friday, Drilon raised the matter and asked officials to explain the slump.
Citing foreign direct investment data from the Bangko Sentral ng Pilipinas, Drilon said there was a 90.3 percent decrease in foreign equity placements at just $141 million in the first half of the year, from $1.448 billion in the same period in 2016.
“We note from the reports that there is a deceleration in new investment. This is very alarming. Why such a huge drop? Is this an indication of anything?” Drilon asked.
He told NEDA officials that the sharp decline in new foreign investments is “reflective of confidence of foreign business in our country.”
“If we are to attract new foreign investment, then it is about time that we take a serious look at how things are going on in our country, because new investment would not come in unless we are able to raise the investors’ confidence level on our country,” Drilon said.
The opposition senator cited the current political climate as a possible "stumbling block" in attracting foreign investments.
The administration has drawn international criticism over its war on drugs amid unexplained deaths. It has repeatedly asserted that it was not behind extrajudicial slays and vowed to resolve unexplained deaths.
In January, the European Union said it was reviewing the Philippines' qualification for trade incentives anchored on compliance with international pacts, including those concerning human rights.
NEDA officials explained that the drop was due to certain "restrictions."
But Senate Finance Committee Chair Loren Legarda did not agree, saying: “I am told that it is because of certain restrictions. I do not agree with that answer because these restrictions were already there when there was an increase.”
“I am candid because I am very concerned. I cannot sugarcoat something because the figure would not lie. I cannot create answers if I am not supplied the justification for the decline in the foreign direct investment," Legarda said at the hearing.
Drilon also expressed concern over the continuing decline of the peso, citing how other regional currencies have increased in value against the US dollar.
He said the peso has depreciated by 6.5 percent from January to August, with analysts predicting it to further weaken to P52.50 by the end of the year and possibly down to P53.54 by 2018.
“These are facts that are developing that we do hope can be addressed by the economic planners in the best way we can in order not to harm our economy,” Drilon said.