Beside the fact that we need to improve our infrastructure…we need some change in economic provisions.

The slowdown in foreign direct investments (FDI) in the first half of the year may be traced to investor uncertainty hounding the second package of the Comprehensive Tax Reform Program (CTRP), Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said.

“FDI slowdown might have been caused by the (CTRP’s) second package, the uncertainty on how the second package will look like and secondly, because of the elections. Investors were in a wait-and-see mode,” Diokno said.

Looking forward, the BSP chief expressed optimism the FDI will show recovery in the second half, allowing the central bank to hit their $9 billion FDI target for the year.

“There will be a pick up in the second half. We are optimistic to hit $9 billion for the year,” he said.

Latest data from the BSP show FDI in the first six months totaling only $3.57 billion, a 38.8 percent decline from $5.84 billion in the same period a year ago.

Likewise, FDI for the month of June alone showed a 48.5 percent decrement with net inflows of only $430 million versus $836 million in June last year.

Socioeconomic Secretary Ernesto Pernia said that in addition to the swift passage of the CTRP’s second package, implementing measures relaxing the entry of foreign investments definitely will contribute to lifting the FDI.

“We have too many restrictions. Just compare ourselves to Vietnam. In Vietnam, practically all areas are farmer sufficient…That’s why they are earning $30 or $35 billion every year compared to our measly $8 billion or $10 billion that we thought could continue to go up,” Pernia said.

“Beside the fact that we need to improve our infrastructure…we need some change in economic provisions,” he added.

The BSP has revised its FDI projection for 2019 from $10.2 billion to just $9 billion.