The Department of Trade and Industry (DTI) has expressed strong confidence of economic recovery this year citing the strong foreign direct investments (FDI) in 2020 are expected to start coming in this 2021.
DTI Undersecretary Rodolfo S. Ceferino said during the Economic Recover Virtual Presser in Malacanang of the government’s economic cluster declared “We are most optimistic of a rebound in 2021.”
The Duterte economic managers are setting GDP target of 6.5 to 7.5 percent this year.
Ceferino cited data showing the economy is moving towards growth. “We began a clear trajectory towards a recovery,” said Ceferino.
For instance, he said the Board of Investments, the government’s premier investment generation arm, registered P1.02 trillion in new committed investments that are expected to start coming in this year and next year. The P1.02 trillion 2020 performance was the second record highest approvals in the 53-year history of the BOI.
In addition, he cited the report of the United National Conference on Trade and Development (UNCTAD) that showed the Philippines bucking the trend in foreign direct investments in ASEAN.
According to the UNCTAD report, FDIS in the Philippines rose by 29 percent to $6.4 billion 2020, bucking the overall hefty contraction in southeast Asian countries.
In its 38th Global Investment Trends Monitor, UNCTAD reported that FDI flows in the Philippines bucked the trend in the region which recorded a 31 percent contraction to $107 billion due to a decline in investment to the largest recipients in the subregion.
For instance, the report said that inflows in Singapore fell by 37 percent to $58 billion as M&As contracted by 86 percent. Indonesia FDI flows declined by 24 percent to $18 billion, Vietnam by negative 10 percent to $14 billion and Malaysia by hefty decrease of 68 percent to $2.5 billion. In Thailand, FDI contracted by 50 percent to $1.5 billion, mainly due to a large divestment by Tesco.
Although the situation is still very challenging, Rodolfo said the Philippines can be very responsive and this has shown in the slowdown in the reduced pace of economic slowdown on a quarterly basis. For instance, the worst GDP and employment contractions were recorded in April, but this has improved as the economy gradually reopened. Unemployment climbed to 17.7 percent in April but this has gradually gone to the latest 8.7 percent although still lower than the less than 5 percent pre-COVID.
The reduction in GDP also slowed down to 8.3 percent in the last quarter last year from 11.5 percent in the third quarter, leading to the overall 9.5 percent reduction in the entire of 2020.
In addition, there had been phenomenal increase in the number of entrepreneurs that are putting up online businesses from 1,700 DTI registration to more than 80,000 busines registrations last year.
Rodolfo said the DTI will continue with its REBUILD strategy, which has a two-pronged goal of revitalizing industries and empower consumers to address supply and demand. The objective, he said, is to have an integrated and high value services to contribute to socio economic development, poverty reduction and environmental protection.
This means DTI initiatives will focus on increasing forward and backward linkages by modernizing Philippines industries particularly steel and the chemical sectors to create more job opportunities.