FDI pullback seen as investors pause

    There will be a  short-term pullback by investors in the Philippines as those planning to enter the country for the first time may pause and reassess their projects.

    This was the assessment of Mono Bhattacharya, partner at RKCA Investment Banking   in the report “Shaping the New Reality: How Philippine Organizations are Responding to a New Business Environment” conducted by KMPG.

    While the fundamental considerations to invest in the Philippines are unchanged — a relatively young population and high English fluency — Bhattacharya said there may be a slight decline in foreign direct investments (FDIs) over the next 12 to 14 months.

    “I expect to see FDI to stabilize by 2022 based upon the current assumption around the availability of vaccines and therapeutics,” he said.

    Bhattacharya said those which have invested before will have the confidence to move ahead with their projects.

    Specific to the business process outsourcing (BPO), Bhattacharya expects the  industry in the Philippines  to experience nominal to flat growth this year.

    “While the BPO industry in the Philippines may not experience the growth that it has been accustomed to in the past, the growth is expected to return as the vaccines are distributed and administered throughout 2021, “ Bhattacharya  said.

    The Information Technology and Business Process Association of the Philippines (IBPAP) sees industry to be flat this year from end-2020 estimate of $26 billion in revenues and 1.3 million in employment. – Irma Isip