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By Maricel E. Burgonio Reporter
FOREIGN direct investments (FDI)
will increase significantly next year, according to the Bangko
Sentral ng Pilipinas (BSP).
BSP Deputy Gov. Diwa C.
Guinigundo said FDI would reach $3.6 billion next year, a turnaround
from this year’s estimated net divestment by foreigners of $1.2
billion.
“The negative net FDI was
because Mirant borrowed foreign exchange but direct investments went
down,” Guinigundo said.
US-based Mirant earlier sold its
power plants in the Philippines to a consortium of Tokyo Electric
Power Co. and Marubeni Corp for $3.424 billion.
At end-September, net FDI reached
$1.9 billion, 22.3 percent higher than the $1.6 billion recorded in
the same period last year.
Behind the net FDI in September
were net equity capital placements of $95 million mostly into the
real estate and manufacturing sectors.
Despite the higher expected FDI
next year, foreign portfolio investments, which are placed in
peso-denominated financial assets like stocks and bonds, are seen to
decrease to $3.3 billion next year from the estimated $4.3 billion
this year.
“The portfolio investments are
weaker because of possible US economic slowdown and risk
aversion,” Guinigundo said.
Foreign investors have been
cautious about increasing their exposure in risky markets like the
Philippines in the face of a global credit crunch arising from
problems in the US’ sub prime mortgage market. This liquidity
crunch is seen to turn American consumers more bearish, in turn
slowing down exports by Philippines and other countries that ship
largely to the US.
Based on BSP’s latest report,
registered foreign portfolio investments in November reached $1.3
billion, 62 percent of which were used to buy shares of firms listed
in the Philippine Stock Exchange.
For the first 11 months of the
year, net inflows of over $3.7 billion were recorded. This level was
1.8 times the $2.1 billion net inflow realized for the comparable
period last year.
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