Foreign investors trooped back to PH in July

‘Hot money’ inflow hit $895M in July, reversing net outflow in June

A+
A
A-

Foreign investors trooped back to the Philippines last month amid optimism over the Aquino administration’s economic agenda and expected recovery of the United States economy, the country’s largest trading partner.

Foreign portfolio investments—or placements in stocks, corporate bonds, and government debt—reached a net inflow of $895 million in July, the Bangko Sentral ng Pilipinas (BSP) said Thursday.

This was better than the $23-million net outflow recorded in June, when foreigners repatriated their funds following hints by the US Federal Reserve on the end of its easy-money policies. Portfolio investments are often referred to as “hot money” because of the speed at which they can enter and exit markets.

The net inflow in July more than offset the net outflow of $663.82 million in the preceding two months.

“Investments rose year-on-year by 17 percent from $2.2 billion due to renewed optimism after the State of the Nation Address (Sona) by President Aquino,” the BSP said in a statement.

In the Sona last month, Mr. Aquino outlined several economic reforms such as the rationalization of fiscal incentives and the relaxation of the “cabotage” law, which currently restricts foreigners from plying interisland shipping routes in the country.

These planned reforms, as well as the crackdown on smuggling that was also highlighted in the President’s speech before Congress, were welcomed by foreign investors as signs of the administration’s seriousness to further strengthen the country’s economic base.

Registered investments for the month reached $2.5 billion. The bulk of these funds went to publicly listed shares, while the remaining went to peso time deposits and government securities.

The registered investments for the month were 11.3 percent lower than June’s figure, but this was mainly due to the one-time block sale of shares in publicly listed Cosco Capital Inc., the BSP said.

Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

  • delpillar

    Another Japanese company will open next month in Laguna Technopark, Binan Laguna. It is a small Japanese company engaged in machine shops, metal works, metal fabrications, metal/plastic molding and precision mechanical components used in appliances and electrical/electronic equipment.

    Japanese newspapers reported this news on July 23.

    The name of the company is: NIHON TRIM INDUSTRIES PHILS.,INC

    This is a small Japanese company based in Shizuoka Prefecture, Japan

    金型製作の日本トリム(焼津市、平川広文社長)はフィリピンに進出する。9月に現地で工
    場を稼働し、フィリピンの日系企業向けに金型の修理や維持・管理、製作を始める。国内の
    取引先の海外進出で受注が減ってきたため、日系企業が多いフィリピンで需要を取り込
    み、事業拡大につなげる。

  • delpillar

    Eto ang isa sa lumabas na business news sa Japanese Newspapers nung July 24.

    ______________________________

    Ibig sabihin daw ay SEVEN small-and-medium software companies in SAPPORO (Hokkaido Prefecture), JAPAN will invest in CEBU by the end of this quarter or this year. Small software companies in Japan are those with capitalization of less than 1000 lapad (1 lapad = 10,000yen or 4,200pesos). Medium Japanese companies are those with capitalization of 1,001 to 9,999 lapad.

    Each of these seven software companies will initially invest a capital of about 350 lapad to 1,000 lapad in Cebu.

    Some of these companies are:
    PRIPRESS CENTRE CO. LTD
    TOKO CREATIVE CO. LTD.
    SPACE SOFTWARE CO. LTD.
    INTELLIGENT LINK (Sapporo, Hokkaido) CO. LTD.

    コンテンツ作成やソフトウエア開発などを手掛ける札幌市内の7社が来夏、フィリピンに共
    同拠点を設ける。台湾やシンガポールを含めアジアに進出する日本企業から、ホームペー
    ジの英訳や現地展示会で使うパンフレット製作などの受託を狙う。英語が普及し人件費の
    安いフィリピンで事業化することで、価格競争力を高める。
    参加するのは印刷業のプリプレス・センター、映像企画の桐光クリエイティブ、ソフトウエ
    ア開発のスペース、ウェブサイト開発のインテリジェント・リンクなど。フィリピンの拠点は各
    社が出資し現地法人をつくる方向で調整している。資本金は350万~1千万円とする予定
    だ。

    共同拠点では日本語のホームページを英語に翻訳したり、英語で商品を紹介するパンフ
    レットを作ったりする。またスマートフォン(スマホ)向けのアプリケーションや、アジアで人気
    の日本アニメの英訳を担う。英語対応した印刷デザインや、海外展示会で建造物などに映
    像を投映するプロジェクションマッピングの技術も提供する。

  • Mario_Garcia

    They are not investors, they are speculators, their money should not form part of our economic statistics because they are purely gamblers, they do not contribute to long term employment and fixed asset capital investments to our country, I wonder why their figures are included in our economic forecast. It is a useless data.

    • Mazza02

      An increase in net portfolio investments can be a good indicator of foreign sentiment with regards to doing business in Philippines as it is a direct manifestation of their confidence in the business prospects of the companies they invest in albeit with some element of what you term hot money.

  • Aydunlayk

    Uy parang kilala ko rin kung sino ang unang lalayas bigla kapag nagka-leche leche na hihihi…

  • upupperclassman

    Mr. Montecillo, the foreign investors are not coming back, get this correct in your mind. What is coming back is the speculative hot money that will ravage our fragile financial market. If you still cannot tell the difference, go back to school to study some more.

  • http://www.yellowmythbusters.gov.ph/ Weder-Weder Lang

    Time to separate hype from hope, fact from fiction:

    (a) Foreign portfolio investments = Speculative hot money
    (b) Speculative hot money = short-term quickie gains for foreign investors
    (c) Speculative hot money = not FDIs, therefore jobless bubble.

    The real news according to PDI / Biz World the last few days is:

    (a) “GDP expansion seen to decelerate on infrastructure constraints” – PDI
    (b) “Hunger worsens” – Business World online
    (c) “Government urged to grab every opportunity . . . Infra missing link” – Citibank
    (d) “Net foreign investments down to $17M in May, 5-month total hits $1.522B, down from $1.66B in 2012″ – PDI

    • Mazza02

      Foreign Portfolio Investments does not have to be negative as long as it is properly regulated as it has its uses (increase liquidity, confidence indicator etc).

      The real news is that Philippines is one of the very few countries doing relatively well in the most challenging external economic environment the world has faced since the Great Depression. The economic related news article you quoted are not bad news but serve as cautions and reminders of the need to keep improving. Learn to read. With regards to the hunger…this is purely statistical magic as the measurement and methodology used is highly arbitrary and is full of holes pointed out in other countries.

To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.

Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:

c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94

editors' picks

advertisement
advertisement