|
By Maricel E. Burgonio, Reporter
FOREIGN interest in peso-denominated assets such
as shares of Philippine listed firms and government debt papers
surged in 2007, but investments meant to establish or expand
businesses in the country are poised to fall short of expectations,
according to the Bangko Sentral ng Pilipinas (BSP).
Net foreign portfolio investments jumped by 35
percent to $3.5 billion in 2007 compared with $2.6 billion in 2006
but were below the full year forecast of $3.7 billion due to risk
aversion brought about by the US subprime housing crisis.
Optimism on the country’s economy prevailed
last year due to sustained strong economic fundamentals, the
generally peaceful elections in May, the appreciation of the peso
and strong corporate results.
Several large initial and follow-on
offerings at the stock market also attracted foreign investors.
“These positive developments in the domestic
economy were, however, partly negated by a number of challenges on
the external front such as the huge global equities sell-offs
triggered by losses in the China and US stock markets during the
first quarter of the year, the widening global credit crunch sparked
by the sub prime mortgage crisis in the US, soaring oil prices, and
the slowing US economy,” BSP Governor Amando M. Tetangco Jr. said.
Gross inflows of portfolio investments reached
$15.5 billion, a 95-percent growth from 2006’s $8.0 billion.
Investments in stock market-listed shares amounted to $12.5 billion,
80 percent of the total and 118 percent higher than in 2006.
Close to three-fourths of these investments went
to property, telecommunications, utility and holding firms.
End-October direct investments contract
Despite foreign bullishness on the
Philippines’ economic gains, foreign direct investments went down
last October, as the BSP blamed this on inter-company loan
settlement of local subsidiaries to foreign parent companies.
Tetangco said the 10-month total dropped by 4.3
percent to $1.851 billion last year from $1.934 billion in the same
period in 2006.
This was due to a 114.9-percent decline last
October, with $51 million in outflows as against $44 million inflows
in September.
The total FDI inflows consist mainly of net
capital placements of $1.833 billion and reinvested earnings
amounting to $339 million. These collective inflows were moderated
by the net outflow of $321 million as existing foreign direct
investors opted to retain part of their earnings in local
enterprises.
Investments found their way to the
manufacturing, services, construction, mining, real estate,
financial intermediation, and agricultural industries.
In manufacturing, most of the capital infusion
was infused in electronics, health and chemical products, food,
automotive sensors, decorative crafts and molded plastic products.
The bulk of inflows came from the US, Japan,
South Korea, Hong Kong, Malaysia, and the United Kingdom.
The BSP projects FDI inflows to reach $2 billion
in 2007, higher than the earlier forecast of $1.1 billion from $2.4
billion in 2006.
|
