Capital flight under Aquino bigger than during Marcos regime


In his last SONA, President Benigno Aquino III boasted: “(Under my administration) and for the first time in history, we are unanimously deemed investment grade by the most prominent credit rating agencies.”

The agencies’ hosannas aren’t really unexpected, what with the nearly P2 billion Aquino’s government has paid them to do these assessments — eight of them.

Only Aquino and his officials really believe in the rosy picture these rating agencies have painted. (Name one really big foreign investment in the past five years.) Foreign and even local businessmen aren’t plunking their money here, but elsewhere, if we go by hard, comprehensive data and not wishful thinking based on anecdotal evidence.

According to official Bangko Sentral ng Pilipinas data, the net foreign exchange (“dollar”) outflow — or the excess of money flowing out of the country over money coming in — in 2014 totaled $2.9 billion.

This amount, just for one year, is nearly as big as the $3 billion in capital flight for the two years of 1982 and 1983 under  Marcos’ watch, during the country’s worst economic crisis triggered by the Ninoy Aquino assassination and our default on the payment of our foreign debts.

Massive capital flight under Daang Matuwid regime

Massive capital flight under Daang Matuwid regime

It is also nearly as large as the $3.3 billion capital flight in 1997 when foreign capital swiftly left Asia in the wake of the Asian Financial Crisis.

According to the BSP itself, the net outflow — reported as the country’s balance of payments position — is the result of Filipinos bringing their huge amounts of money out of the country to invest them abroad, foreigners withdrawing or slowing down their investments in the stock market and other short-term investments here, and overseas firms slowing down their equity inflows into the country.

The BSP of course wouldn’t draw attention to the foreign exchange hemorrhage in 2014. It had still had to report it, though only in dry technical language: “The financial account registered net outflows amounting to US$10.1 billion in 2014, more than fourfold the USS$2.2 billion net outflows registered a year ago. This was on account of the substantial increase in the net outflows in other investments and the reversal to net outflows in portfolio and direct investments,” said the BSP to explain the $2.6 billion BOP deficit.

The rich here have virtually rushed out of the door to bring their money elsewhere starting 2012, when their investments abroad totaled $3.8 billion, growing from just $593 million in 2011. These increased to $6.3 billion in 2013 and then rocketed to $16 billion in 2014.
The moneyed here and elsewhere of course think the same, so they’ve also moved out. Contrary to Aquino’s boast that foreign investments’ level in 2014 are the highest in history, the BSP reported for 2014: “The direct investment account reversed to net outflows of US$789 million in 2014 from net inflows of US$90 million a year ago.”

Even a number of local corporations, according to BSP data, chose to invest in enterprises abroad rather than here, with their direct investments jumping to $7 billion in 2014 from just $3.6 billion the previous year.

It is the same fall in confidence in terms of foreign portfolio investments, or those put in the stock market and other passive venues by firms overseas.. “The portfolio investment account recorded net outflows of $2.5 billion in 2014, a reversal of the previous net inflows of $2.5 billion,” the BSP report said.

The flow of investment funds from the country was so huge that even the increase in remittances form Filipino workers overseas weren’t enough to cover them.

Again, belying Aquino’s SONA claim that things here have been so good that OFWs are returning home, their remittances — because of more deployments rather than due to increases in their wages — grew from $17.6 billion in 2010 to $22.6 billion in 2014.

And Aquino boasts that under him the country has become “Asia’s Rising Tiger”?

We really wish so. But the data just doesn’t show so.
FB: Bobi Tiglao


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  1. Filimon francisco on

    This govt is full of lies and deception….corruption is systemic…the daan matuwid program is only for the oppositions…the MRT / LRT alone is a good gauge to see whether our govt is sincere and focus on the country’s development. …its pathetic….and disgrace….all room for corruption. ..the country is in more irreversible trouble now than Marcos time….the policies and decisions taken were irreversible damaging the country. …

  2. Whatever you say. On my opinion, Cebu has never been progressive today than during the Marcos regime. Not only Cebu but the countryside as a whole. Core development of the country was concentrated in Manila during the Marcos era wherein it was envisioned to become a mega metropolis with its acronym as mega-manila. They forgot the rest of us. We were pushed marginally as we refer the Manila government rather than the Philippine government because there is only Manila and nothing else during that time. Today is better than those years.

  3. Jesus Albert Nebit on

    The $2.9B is BOP deficit. Only $1.4B is the negative FDI. This is absolute amount. If compared against our reserve of around $80B the BOP deficit is very much mangeable. Likewise, 2014 was also the year when Phil prepaid some of its foreign debt to avail of the lower interest rate prevailing in the market. Overall, I share the same positive sentiments from foreign rating agencies on the Philippine Economy. The growth rate is a good starting point. Sustaining it would give the country a good foundation to springboard the improvement of the living condition. This early, it would indeed be a big challenge to see a significant positive change in poverty level as we are starting from a low base. But we are moving there… growing BPO industry, rising exports, improving remittances, aviation repair and maintenance hub, 3rd in shipbuilding tnx to hanjin and keppel, momentum in PPP, expanding Analytics talents, growing tourism industry what with lifting of EU and U.S. air ban, reduction in oil fuel prices, implementation of kto12…etc. Let’s do our share Guys! Think positive!

  4. From what I read, Central Bank autonomy means that any central bank is able to resist undue influences from government, industry and other interests. Bangko Sentral of the Philippines (BSP) “also enjoys fiscal and administrative autonomy from the National government in the pursuit of its mandated responsibilities.” How else are we going to verify the economic performance of the government if you are suggesting wholesale rejection of the data they submit to the World Bank, UN Conference on Trade and Development, IMF etc.? You mean just believe what you tell us?

  5. genesisbughaw on

    the continuing degeneracy is simply a clear reflection of what Abnoy and his yellowtards are doing for the past 5years.
    Sabi nga po nung kaibigan kong bata na ita…nakakain po ba yan?

  6. There was nothing in aKKKino’s SONA that tells the truth. What was truthful was that everytrhing he said were lies.

  7. Mahirap paniwalaan ang sinasabi nila na OK na ang economia ng ating bansa. Mamasyal ka sa saan man lugar sa ating bansa at makikita ang napakaraming tao ang walang trabajo at nagugutom. Magkaroon man sila ng trabaho ito’y hindi panghabang buhay dahil sa usong “contractualization” ng empleado. Kailangan bigyan ng pansin ang bagay na ito, lalong lalo na para sa kinabusan ng mga kabataan. Huwag sana tayong managinip ng gising.

  8. I respect your opinion sir. But i personally think that PH is now one of the booming econs in the world. Those who choose to believe the other way around are just enemies of progress, if we do not believe in our government’s capacities and do not believe that we are elevating, we will just continue that mentality even to the next admins.

    • adam_d_langgam on

      what tiglao wrote was no opinion. he stated the facts. all you need to do is confirm his sources. it’s all in there anyway.

  9. Dragon Scholar on

    As with any new administration, the investment community looked to the Aquino administration for relief from the corruption of the previous President, completely hitching on to the Daang Matuwid promise, causing the spike in capital inflow. (In a way, mirroring the euphoria, albeit to a lesser degree, following Cory’s post-EDSA victory.) But the reality of Aquino’s ineptitude and total reliance on corrupt cronies (note that I do not accuse Noynoy himself of corruption), was a splash of ice water on investor confidence, and they looked eslewhere for investment. Aquino boasted of new jobs created. True enough, until you realize most of those new jobs are part-time ones. Ironically, in his SONA he too slammed the GMA era for Filipinos who ‘voted with their feet’ by becoming OFWs when his own rule saw an increase in OFW activity.
    To be fair, Noynoy’s biggest flaw in my opinion, is not so much corruption but his total ignorance of and insulation from the realities of our people’s suffering (again, reminescent of his mother’s ‘cordon sanitaire’), so that he willingly spouts any spurious statistics handed to him by his cronies.

  10. I checked Peter Wallace report on FDI and I am surprised to find that the data he used was the same data that the World Bank, the United Nations Conference on Trade and Development and the Aquino administration used which you said was submitted and doctored by BSP. Based on what you said on your last article, are those reports nothing but lies then? Jollibee which to date is the most successful Filipino enterprise has exploded worldwide and has 896 franchises and still planning to expand to Canada, UAE, Malaysia, Indonesia, Japan and Europe. Max, SM mall in China and ChowKing restaurants are also following the footstep of Jollibee. These successful Philippine-based companies expanded during the time of the Aquino government and may account for the outflow of funds invested by Filipinos abroad. Eventually the money they invested will come back to help the Philippine economy very similar to McDonald. And you find that a disaster to the Philippine economy too? BTW, if you read the United Nations Conference on Trade and Development chart, the highest FDI that your God and Master, Gloria Arroyo achieved was in 2007 and got 2919 ( in millions of dollars) compared to Aquino in 2014 for 6200. I think you have the responsibility to tell the truth as a journalist.

    • You can believe Peter Wallace, UNCTAD blah blah but all these relied on BSP data which is solely what I used in the article. I wish you wouldn’t resort to crude ad hominem God and Master blah blah. I explained the $2919 figure in my article on Wednesday. $3 billion of these are loans, and BSP changed their definition for FDI. Jolllibee, Chowking, SM the kind of anecdotal things I referred to Might be true but you should provide real data how much they invested abroad. You don’t seem aware what franchises are. You’re downright ignorant though to say Jollibee, Chowking etc expanded during Aquino. Pls check your figures.

    • Jollibee expanded under BS Aquino? Patawa ka naman, Bago pa man maging senador si Idol mong BS Aquino, nag eexpand na sa ibang bansa ang Jollibee.

  11. I wish Amb. Bobbi Tiglao can better explain in simple terms what the 2 graphs mean, especially that not all Filipinos have the know-how to understand what Balance of Payments and Capital inflow and outflow means, neither to read a graph of economic indicators. One clear indication one saw was during the term of Gloria Arroyo saw the rise of the Cash inflow with minimal outflow which improved considerable during the 1st year of the PNoy administration. However, basing on the same graph, the cash out flow is seen to increase from 2012 and became worse in 2014 while the cash inflow which apparently include OFW remittances as well as inward investments decreased considerably. In graph number 1, the Balance of Payments showed the same movement. During the Gloria Arroyo term, the BOP slowly increased (in blue) and showed the same astounding improvement, peaking sometime in 2009 and still looked good during the 1st year of the PNoy administration but after the year 2010, the BOP started decreasing so fast until 2014 when it showed a net loss of 2858 million dollars. Compare the net loss of 1671 during the term Ferdinand E. Marcos. The DAAN MATUWID is a sham which is good only coming from the mouth of PNoy and his lapdogs. In short, our economy is in shambles but this administration continue to propagate the wrong information to the public. Or maybe, PNoy himself does not know how to read.

  12. With ABS-CBN and the Philippine Star backing PNoy, no wonder all the president’s lies become the new truth.

  13. Roldan Guerrero on

    This is another proof that Aquino is not only the worst president but also the most STUPID! No explanation is necessary.

  14. If the economic growth is not true then why they are not discussing it in any business forum? Why almost all business forums locasl and abroads are all telling that we are booming?

    • Leodegardo Pruna on

      But who are saying that the country is booming except those at the top 10% who have been benefiting much from this administration and they are at each other and soon we shall find some to them moving down. The lowest 10% is fast rising. The truth remains hazy but soon it will come out. God bless the Philippines.

    • Bonifacio Claudio on

      Booming for the rich; no “trickle down” so much so that the poor becomes poorer – so much to shoulder the high rates of electricity, water, food, commodities, shelter, & other basic necessities. Just take a look around you… Believe me, man, I’m one of your common tao…