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Foreign direct investments down in January

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MANILA, Philippines—Net inflow of foreign direct investments (FDI) plunged in January as uncertainties in the global front, such as those brought about by weakness of advanced economies, prompted fund owners to exercise prudence in making business decisions.

The Bangko Sentral ng Pilipinas on Wednesday reported that FDIs posted a net inflow of $576 million in January, down 45 percent from the $1.05 billion in the same month last year.

Gross inflow of FDIs reached $1.29 billion, up by about 20 percent from $1.08 billion.

However, the effect of higher gross FDI inflow was wiped out by the surge in FDI outflow. FDI outflow hit $711 million, about 32 times the $22 million registered in January last year.

Monetary officials said the ability of the Philippines to attract investments partly hinges on developments in the global economy. The prolonged crisis in the eurozone and the anemic growth of the US economy are seen as dragging down growth prospects for the global economy, thus affecting the appetite to invest even in economies that are performing favorably.

The BSP, however, believes the net FDI inflow in January was significant enough to meet the government’s 2013 projections on foreign investments.

Under the original forecast, net inflow of FDIs are seen to reach $2.2 billion this year.

Monetary officials are now reviewing the projections for FDIs and other sources of foreign exchange, such as exports and remittances, for possible revisions. The results will be announced this month.

They said there was a likelihood that the forecast for FDIs could be raised on account of the impact of the country’s attainment of its first-ever investment grade rating from a major international credit rating agency.

They said the decline in net inflow of FDIs in January could be reversed in the months ahead because of the potentially positive effect of the investment grade rating on investor sentiment for the Philippines.

Last month, Fitch Ratings upgraded the country’s credit rating by a notch from BB+ to BBB-, which is the minimum investment grade.

Fitch cited macroeconomic fundamentals that showed improved ability of the Philippines to service its debts to foreign creditors. These fundamentals include the buildup in the country’s foreign exchange reserves, the government’s declining debt burden, and sustained growth of the economy.

Meantime, economists said that the country needs to accomplish more besides investment grade status to attractmore FDIs.

They said the Philippines needs to address problems like inadequate infrastructure and the tedious process of setting up businesses, and to invest more in education to improve the quality of its workforce.


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  • joboni96

    GOOD

    less foreign carpetbaggers

    pilipino economy
    benefitting pilipinos only

  • kilabot

    there goes the fitch rating,
    didn’t fix anything;
    everything just wasted saliva.

  • disqusted0fu

    FDIs have been generally down since Pnoy took the seat as President. Let’s face it… Pnoy just doesn’t know what he is doing especially when it comes to the economy of the PH. He is all about short term plans for the benefit of his recognition. And it also doesn’t help that his administration is not doing anything about the rampant smuggling in the PH which is causing foreign investors to be scared in investing in the country.

  • PinoyDude

    The last paragraph categorically tells us what’s wrong with our country.

    “They said the Philippines needs to address problems like inadequate infrastructure and the tedious process of setting up businesses, and to invest more in education to improve the quality of its workforce.”

    Realistically, all of these cannot be done overnight, The government with the help of the private sector has to muster enough political will if it wants to reform this country.

  • carlcid

    This only shows that the inflow of foreign funds is primarily “hot money” chasing short-term gratification. Nobel-prizewinning economist Paul Krugman warned that “the best predictor of crisis is large inflows of foreign money”. In almost all cases, “the foundation for crisis was laid by a rush of foreign investors into a country, followed by a sudden rush out”.

    The PNoy administration may blow hot air while the going is good. But, unless the foreign fund inflows change into more lasting FDI’s, all this bragging will one day turn into condemnation and recrimination because bubbles don’t last forever. The blame game may well happen after PNoy’s term. But, if PNoy truly cares about his legacy, and not just achieving temporary political gain and propaganda, then he should order his economic team to look for ways to stop the inflow of hot money and seek more foreign direct investments.

  • Weder-Weder Lang

    Sa Daang Matuwid, FDIs are down & hot money is up & bubbles everywhere.
    Sa Daang Matuwid, only OFW remittances are keeping us afloat.
    Sa Daang Matuwid, corruption is proliferating forevermore.
    Sa Daang Matuwid, unfettered smuggling is out of control sabi ng IMF.
    Sa Daang Matuwid, KKK, Inc. thrives & krony-capitalism is alive.
    Sa Daang Matuwid, only the oligarchs and hacienderos win.
    Sa Daang Matuwid, soaring paper tigers never really take off and soar.

    That’s because sa Daang Matuwid, everything is just propaganda, lahat puro drawing. Walang crouching tiger, walang hidden dragon. At mas walang soaring paper tiger.

    (to learn how to fold origami tigers, visit www,childsplay,com/origami/paper-tiger/image01)

    • http://www.facebook.com/profile.php?id=1711094250 Winzum Daoas

      Right, you are expecting the administration to completely solve problems that arose and problems that have not been successfully solved in the past administration that had 9 years. THe problem with the filipinos is that they expect too much. They expect that one president will solve all their problems, when that president ends his/her term without solving the problem, even if they made significant leaps to temper the problem, the filipinos still hate them. THe proof of this is that the opposition in one presidents term becomes the administration in anothers term. Governance should be a continuity in foresight and principles. What happens is that each administration cancels out each others efforts and they want to start back at square one to claim credit for those accomplishments. THat is why problems that can only be solved through the continuity of principles through multiple administrations still persist and at times worsen or lead to another problem.

      • Weder-Weder Lang

        Ang dami mong sinabi but very little sense. That’s how a PNoy propaganda sounds like, all talk, but no action. Kaya napag-iiwanan.

        But if you love to be deceived by propaganda, by all means make yourself happy.

      • yaonglaan

        at meron pang naniniwala sa mga dating mga Tusong namuno na kung tutuusin kung mag aaral lang tong mga bobong pinoy na mga to e malalaman nilang yung mga iniidol nilang mga dating lider na nagsadlak sa Pinas sa kahirapan e mga bugok na sila lang ang kayang utuin



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