FOREIGN DIRECT investments (FDI) stayed positive in August but were significantly below year-ago levels amid uncertainties abroad, the Bangko Sentral ng Pilipinas (BSP) yesterday reported.
August’s net FDI inflow of $50 million was down 55% from a year earlier, the central bank said in a statement. The result raised the eight-month tally to $810 million, 19.2% lower compared to the $1 billion notched in the same period last year.
“Notwithstanding the Philippines’ solid macroeconomic fundamentals, global economic setbacks … have profoundly affected economic prospects, causing investor risk aversion to rise sharply,” the BSP said.
Commenting on the data, University of the Philippines economist Benjamin E. Diokno said, “The January to August FDI numbers indicate, at best, no change in foreign investors’ poor perception of investment opportunities in the Philippines.”
“At worst, it indicates the waning interest in the country as an investment destination.”
The central bank said net inflows in the other capital account hit $272 million, “largely on account of trade credits extended by affiliates abroad”. The amount, however, was 51.3% lower from last year.
Diminishing the impact were higher net equity capital inflows and reinvested earnings, up 25.6% and 17.3%, respectively, to $260 million and $278 million.
Most of the investments came from the United States, Japan, Hong Kong, the Republic of Korea and Singapore.
“These were channelled mainly to real estate, manufacturing, mining and quarrying, utilities, and wholesale and retail trade sectors,” the BSP said.
The increase in reinvested earnings, meanwhile, came as “foreign enterprises, encouraged by the country’s resilience amid the persisting global economic uncertainties, preferred to retain their earnings in local corporations,” it said.
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By: NJCM
Source: Business World, Nov. 10, 2011
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