Net FDI down 76% in October
By Michelle Remo
Philippine Daily Inquirer
First Posted 01:21:00 01/13/2009
Filed Under: Investments, Economic Indicators
Net inflows of foreign direct investment (FDI) dropped by about 76 percent to $31 million in October from $129 million a year earlier, the central bank reported Monday.
The January-October net FDI fell 46.4 percent to $1.42 billion from $2.65 billion in the same period in 2007, said the central bank, Bangko Sentral ng Pilipinas (BSP).
FDI inflows in the 10 months amounted to $1.596 billion while outflows reached $178 million. Of the inflows, $1.22 billion was fresh capital and $374 million was reinvested earnings.
The BSP said the investments came mostly from the United States, Japan, Singapore, South Korea, Germany, Malaysia, Taiwan, Hong Kong, United Kingdom and the Netherlands.
The infusions were in manufacturing (shipbuilding and ship repair, auto electronics parts, and paper/cigarette/tobacco products), services, mining, construction, utilities, real estate, trade and financial institutions.
In a statement, the BSP said the sharp decline in the net FDI inflows was a result of the lingering global crisis, which raised risk aversion among investors. Although the crisis emanated from advanced economies like the United States and those from the euro zone, economists said, emerging economies like the Philippines were not spared from its ill-effects.
“Investment decisions were stalled by foreign investors’ concerns over the developments in financial markets, particularly in the weeks following the unfolding of the global financial crisis in late September,” the BSP said.
In September, the US investment bank Lehman Brothers declared bankruptcy. Other US-based financial institutions that were adversely affected by the crisis tried to improve their liquidity by withdrawing investments in emerging economies. With editing by INQUIRER.net
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