Latest Stories

Citi also bullish on PH, other Asian economies

Global banking group Citi has joined the growing list of foreign banks that have turned bullish on Asia, saying key economies in the region are becoming the new “safe haven” for portfolio investments on the back of lingering problems in the United States and the Europe.

In a report on its latest outlook for the global economy and for Asia, Citi said emerging markets in Asia were likely to attract more hot money given the changes over the past few years in the contributions of various economies to global growth.

Since the latest global economic crisis, which was punctuated by a recession for many industrialized counties in the West in 2009, Asian economies have been drivers of the global economy.

Meantime, the international financial services firm also said the shifting policy in China toward a more market-determined exchange rate for the renminbi would attract more investments to the East.

Citi said Asia has been stealing the image of the United States and other advanced economies as a safe haven. “Growing confidence over Asia’s growth resilience, strong external and fiscal balance sheets and expectations of some Asian currencies decoupling from (the US dollar index) on the back of regime change in China’s foreign exchange policy toward a more market-based RMB (renminbi) will reinforce the perception of Asian fixed-income market receiving ‘safer-haven’ flows,” Citi said in the report.

In the case of the Philippines, foreign portfolio investments have been partly credited for fueling the significant appreciation of the peso so far this year. The local currency, which has touched the 40-to-a-dollar level Tuesday, has already appreciated by nearly 7 percent since the start of the year.

Documents from the Bangko Sentral ng Pilipinas showed that the country recorded a $2.97-billion net inflow of foreign portfolio investments since the start of the year to November 9. This was lower than the $3.79 billion in net inflow in the same period last year but was significant enough to put an appreciation pressure on the peso, traders said.

According to Citi, central banks of some Asian countries might be prompted to implement policies restricting the entry of foreign portfolio investments given the exchange-rate volatility that these inflows were causing.

Although foreign investments were welcome, economists said too much of such funds could be destabilizing to an economy and the resulting volatility in the exchange rate would be bad for business.

In the case of the Philippines, the central bank said it was not poised to impose restrictions on foreign capital flows. While agreeing that excessive foreign portfolio investments have adverse consequences, the Bangko Sentral ng Pilipinas said outright restriction of foreign capital could drive away even the essential investments.—Michelle V. Remo

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Asia , Citi , economy , Philippines , portfolio investments

Copyright © 2014, .
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


  • 12 dead, 96 injured in Holy Week accidents–NDRRMC
  • Filipino devotees re-enact crucifixion of Christ
  • Rouhani talks peace, outreach at army parade
  • Rains, thunderstorms on Good Friday
  • Carbon monoxide leak suffocates 20 in Catbalogan City
  • Sports

  • Heat seek Three-peat but Spurs, Pacers top seeds
  • Can Spurs get back at Heat? Can they survive West?
  • Hopkins, 49, seeks win for the ageless
  • LeBron still No. 1 with NBA’s most popular jersey
  • Pacquiao back in PH, heads home to wife, kids
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • ‘X-men’ filmmaker slams ‘fabricated’ sex attack claims
  • Singer Chris Brown’s bodyguard on trial in DC
  • Whoopi Goldberg debuts as marijuana columnist
  • ‘X-men’ director accused of sex assault on teen boy
  • Cannes film festival launches race for 2014 Palme d’Or
  • Business

  • Italy sells luxury state cars on eBay
  • Asian shares mostly up in quiet trade
  • Dollar up in Asia on US jobs data, Ukraine deal
  • Barbie doll has a problem
  • Oil prices mixed ahead of long Easter weekend
  • Technology

  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Filipinos #PrayForSouthKorea
  • Taylor Swift tries video blogging, crashes into fan’s bridal shower
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • WHO warns vs spread of MERS-Cov, urges vigilance in taking precautions
  • Last call for nominations to ’14 Presidential Awards
  • San Francisco business coalition slams proposed tax on sugary drinks
  • A ‘time-travel’ production of ‘Les Miserable’ at Stanford
  • Filipina Maryknoll sister honored for years of service
  • Marketplace