The country registered a net inflow of foreign direct investments (FDIs) in October last year, recovering from the net withdrawal suffered during the same period in 2010, as Philippine growth prospects eased the impact of the bearish global economy on investor sentiment.
The Bangko Sentral ng Pilipinas (BSP) reported Tuesday that FDI inflows to the country stood at a net inflow of $58 million last October, a swing from the net outflow of $32 million in the same month of the previous year.
Gross inflows for the month were recorded at $60 million, while the outflows stood at $2 million.
Officials said the reversal in October was due to the belief that the Philippines, like other emerging economies in Asia, would still grow despite the ill-effects of the debt crisis in the eurozone, as well as the sluggish growth of the US economy.
The net inflow of $58 million, however, was still meager as investors took a cautious stance while the world economy is being dragged by the crisis in the West.
The investment outcome in October brought FDIs from January to October to a net inflow of $729 million. The amount was, however, lower by nearly 25 percent than the net inflow of $968 million recorded in the same period of the previous year.
Gross inflows in the first 10 months amounted to $1.134 billion, while outflows reached $405 million.
The BSP said that compared with 2010, the sentiment of foreign investors last year was less favorable because of the prolonged debt crisis in the eurozone and the slower-than-expected recovery of the US economy from recession in 2009.
Consequently, the Philippines cornered less FDIs, officials said.
“Investment decisions were stalled by renewed concerns over the prevailing uncertainties in the global economic environment and greater risk aversion following intensified financial strains in the eurozone and the continuing weak US economic performance,” the BSP said in a statement.
The investments cornered by the Philippines in the first 10 months were mostly from investors based in the United States, Japan, South Korea, Hong Kong, Singapore and the Netherlands, said the central bank.
The investments were mostly placed in manufacturing, real estate, mining, gas, trade and financial sectors.