Determinants of Investments in the Philippines
DID YOU KNOW? Private investments in the Philippines are heavily influenced by three factors:
- Real GDP Growth
- Real Lending Rate
- Public Investments
Real GDP Growth – When real GDP rises, market opportunities expand. This encourages the private sector to set up or expand production capacities to take advantage of rising demand.
Lending Rate – The rise in interest rates tends to discourage private investments, especially in sectors with lower rates of return.
Public Investments – Public investments are sensitive to revenue collections, which are highly correlated to real GDP. When the government pursues rapid investment-led growth, it has to boost public sector resource mobilization through tax policy and tax administration reforms.
Learn more about the determinants of investments through the infographics above
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