Net FDIs fell in Nov. 2012 to $102M, says BSP
Net foreign direct investments fell to $102 million in November last year, down 72 percent from $366 million recorded in the same month the previous year, according to the Bangko Sentral ng Pilipinas.
Officials admit that the drop means that the positive outlook on the economy has yet to translate to placement by foreigners of more long-term and job-generating capital.
For the first 11 months of 2012, net FDIs amounted to $1.23 billion, up by only about 1 percent from $1.22 billion in the same period the previous year.
FDIs in January to November last year came mostly from the United States, Hong Kong and Australia.
Sectors that benefited the most from the FDIs during the period were real estate, manufacturing and mining.
BSP officials said the Philippines and other emerging Asian markets have become attractive to foreigners given their favorable economic performance.
They said, however, that the optimism on the Philippines has so far translated only into a surge in portfolio investments.
They acknowledged that FDIs to the Philippines continued to lag behind those cornered by neighboring countries.
For instance, while the gross inflow of FDIs to the Philippines amounted to only $1.5 billion in January to November, the amount cornered by Indonesia in the third quarter of 2012 alone reached nearly $6 billion.
The gross FDI inflow to the Philippines in the 11 months was down by 8 percent from $885 million in the same period of 2011.
Common factors cited for the anemic FDIs to the Philippines include tedious process for setting up businesses, high power cost and lack of appropriate infrastructure.
Officials, however, are hopeful that FDIs will significantly rise over the short to medium term.
As the country sustains improving economic indicators, they said, foreign fund owners will have more confidence in making long-term investments in the country.
The Aquino administration is also hopeful that the Philippines will start enticing more FDIs once it gets an investment grade. The consensus among government officials and private-sector economists is that the Philippines will finally be given an investment rating toward the end of this year.
