PH becoming investment-led economy - DOF - The Daily Sentry

Wednesday, August 22, 2018

PH becoming investment-led economy - DOF

Chief Economist Gil S. Beltran / Photo from YouTube
As capital formation climbs further in the first semester of the year, the Department of Finance on Monday, said Philippines is currently altering into an investment – driven economy.

The agency noted the country’s capital formation based on its latest economic bulletin, suggesting an increase in the Philippines’ Gross Domestic Product (GDP) recorded at 27.4% compared to the 25.4% in the same period in 2017.

Noting that capital formation is the “most comprehensive measure of investment,” Finance Undersecretary and Chief Economist Gil S. Beltran said that the said quantifier was also “one of the foremost determinants of future growth, in addition to employment and factor productivity.”

“Capital formation … shows a real growth of 9.4 percent in 2017 and 16.4 percent during the first half of 2018. These growth rates are higher than real GDP growth of 6.7 percent and 6.3 percent, respectively,” Beltran added.
Photo from Bilyonaryo
Foreign Direct Investment (FDI) is another indicator along with portfolio investments following the course of the balance of payments account released on a cyclical basis by the Bangko Sentral ng Pilipinas (BSP).

“FDI is the more important indicator because it measures the amount of investment through controlling ownership in a business by foreign investors which implies more active participation and more commitment by the investor in business policies and management,” Beltran said.

“It is distinguished from foreign portfolio investment in that the investor in FDI exercises some degree of control. A portfolio investor may buy and sell stocks daily and shifts from one bond or stock to another and generates profits on price differences,” he added.

Beltran stressed that this year’s economic growth target is attainable should capital formation considerably ascends by the second semester.


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