The President’s lies on foreign-investment flows


In his recent State of the Nation Address, Aquino bragged: “Just look: back in 2010, net foreign direct investment in our country was at $1.07 billion. In 2014, net foreign direct investments reached $6.2 billion. This is the highest ever recorded in our entire history. “

What a liar.

To start off, let’s have business consultant Peter Wallace — who has been supportive of Aquino in his Philippine Daily Inquirer column (and recently made Filipino by an act of Congress)—blow a big hole on that claim:

“A huge chunk—54 percent, or $3.35 billion, was made up of intercompany loans or borrowings of local subsidiaries from their parent firms.” Wallace wrote in his recent column. “Nice, but it’s just the confidence of the guys that are already here. Another 13 percent comprised reinvested earnings—again the guys that are already here. Only 33 percent was made up of new equity investment.”

Aquino is right that the $6.2 billion “is the highest ever recorded in our entire history” only because that figure for the first time in history includes not just foreign equity but even foreign debts, the amounts of which are  even suspect.

The Bangko Sentral ng Pilipinas — which used to be the country’s island of excellence and professionalism until it leaked confidential dollar accounts in the Corona impeachment case and now in Vice President Jejomar Binay’s character assassination program—has been recruited into Aquino’s propaganda machine. Another institution is made to bite the dust by the Yellow Lord.

Starting in 2013, the BSP revised its statistics to include even private foreign loans and other forms of debt instruments to companies here as part of its data on “foreign direct investments”. This obviously bloated the amount of foreign capital coming into the country under Aquino’s administration.

Investment or equity is your money, your cash that you put into a company. The loans you take out to finance your company are your company’s indebtedness. The BSP instead has revised the English language to create a rosy picture of Aquino’s administration, so that foreign direct investments include debts.

If one sticks the standard definition of investment, net foreign capital that flowed into the country in the last four and a half years of former President Gloria Macapagal-Arroyo totaled $6.1 billion. This is $1 billion bigger than during Aquino’s regime until 2014 (for which year whole-year figures are available) which amounted to only $5.0 billion.
bpmg20150812The figures during Arroyo’s administration are impressive since there was even significant capital inflow in 2008 and 2009, or during the Global Financial Crisis, considered the worst since the 1930s depression. At that time, foreign capital flows to our neighbors in Southeast Asia even reversed and became huge net outflows.

According to World Bank figures, Vietnam, Thailand and Indonesia together had $17 billion and $9 billion in foreign capital fleeing their countries in 2008 and 2009, respectively. In contrast, the Philippines still managed to post $1.2 billion and $1.7 billion in net foreign direct investments for 2008 and 2009, respectively.

The main reason for this continued optimism of foreign capital at that time was the so-called Economic Resiliency Plan swiftly undertaken by President Arroyo. Totaling P330 billion, the plan injected much-needed funds in the system to counter-act the dampening of economic activity resulting from the Global Financial Crisis.

In fact, it was the Philippines’ success in weathering that severe worldwide economic crisis that convinced the world business community that the country’s fundamentals had become solid — better even than Thailand, Indonesia and Vietnam. Foreign investors subsequently rushed to the country after the global crisis, with Aquino and his Finance Secretary Cesar Purisima foolishly and falsely claiming that this was because of their wacko Daang Matuwid vision.

Because of those sold economic fundamentals that Arroyo built which the global crisis tested, Aquino could have spent the past five years mostly playing his X-Box, and foreign capital seeking profits would still have flowed into the country, and together with OFW remittances enlivened the economy for an average 6.2 percent GDP growth. (If you don’t believe that, think: What economic reforms has Aquino done?)

Worse, I suspect that BSP tampered with its figures because of the following reasons.

First, while it posts in its website a very detailed breakdown of where foreign equity came from ($2 billion from Hong Kong for instance from 2005-2014), the BSP does not give a country breakdown for “debt instruments.” Why, if they can get these from the companies where they got the figures on equity investments?

Second, the level of “debt instruments” the BSP reported inexplicably increased seven times from just $391 million in 2012 to $2.7 billion in 2013 and then nine times to $3.3 billion in 2014. There just hadn’t been any major change in the world or domestic financial system that created such a deluge of “debt instruments” to the country.

Third, the entry of “debt instruments” suspiciously came in surges: $525 million and $471 million on January and July 2013, respectively; $583 million, $424 million, and $457 million in January, June, and September of 2014, respectively

Such surges just do not happen in a financial system undetected by the market, as these weren’t.

Fourth, a more telling indication that the BSP may be tampering with data is that the amounts of debt instruments that came in in 2013 ($2.7 billion) and in 2014 ($3.3 billion) are inexplicably so huge that it would be impossible that these didn’t strengthen the peso’s value.

On the contrary, despite these purported huge inflows, the exchange rate was unchanged at P42 to the dollar in 2013, and even depreciated to P44 in 2014 – when there was supposed to be a flood of dollars from the purported $3.3 billion foreign “debt instruments”. The exchange rates were even unchanged in the months when there were huge inflows of such “debt instruments.” The only explanation is that this reported inflow of debt-instruments, didn’t really exist, except in the mind of some Aquino operative in the BSP  tampering with the data.

Unbelievable surge of “debt instruments” from 2013 to 2014, which incredibly even strengthened the peso. (Source: BSP)

Unbelievable surge of “debt instruments” from 2013 to 2014, which incredibly weakened the peso. (Source: BSP)

Fifth, the BSP doesn’t have the system to quickly count “debt instruments” in the past years, especially during Arroyo’s administration. I suspect they couldn’t or deliberately didn’t find the records on “debt instruments” for the past years so Aquino can brag that the $6 billion in “foreign investments” is the highest in history.

And sixth, the BSP’s own data contradict themselves. The data on “Debt Instruments” in its report on foreign investments turn up as “Direct Investment: Intercompany lending” in its report on “External Debt.”

However, this external-debt report, reported a surge of intercompany lending in 2013, but amounting to only $1,683 — nearly a billion dollars less than the debt-instruments totaling $2,654 in its foreign investment report. It’s worse for 2014, when the amount of intercompany lending totaled only $195 million, a trickle compared to the $3,346 million the BSP reported as “debt instruments” in its foreign-investment report.

The BSP’s attempts to please Aquino have created a distorted picture of our economy, and it is a dangerous one.

In its new definition of foreign investments, more than half of this is in the form of debt, and only a third in real equity. By the BSP’s system, we may be building up our foreign debts toward a debt crisis, while its reports paint a rosy picture of massive foreign capital surging into the economy.

Only for Aquino to boast in his SONA about something that wasn’t true.

FB: Bobi Tiglao


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  1. What a liar..! Kita naman ninyo, sinabi niya (Pnoy) mismo sa endorso kay MRoxas, na mananatili sila sa “power” for 18 years..Tanong ko lang, ‘asan na ba yong perang nalikom para sa mga Yolanda victims?? Naniniwala tayong maganda naman ang report ng World Bank, eh saan ba galing ang datos nila kundi sa mga sinungaling taga BSP na na-pollute ni Pnoy!

  2. Grace Poe at Susan Roces” Follow me, “ang sinungaling ay kakambal ng magnanakaw!”
    Sino yan? yan ay Pnoy,not yellow but yelo(ice) mind. manhid ang utak sinungaling pa!

  3. We are improving but still lags behind with our neigbhor, we think we are doing great and yet we are still behind..Nakakatawa ba o kaawaawa tayo!!In terms of jobs, infrastructure, quality of life, we really don’t need stats but just to look around, may nagbago ba talaga..?!

  4. You failed to mention that under President Noy’s term the country got an unprecented 9 credit upgrades, up to investment grade, and that economic growth was the highest 5 year stretch in 40 years. What a a twisted, malicious, angry account.

    • adam_d_langgam on

      he he he … chill. in your desire to defend the inept one, you just raised up your high blood pressure.

      who cares about upgrades etc etc etc if there’s no investor coming in? the ordinary pinoy cannot eat your upgrades. only the rich can avail of these upgrades if they decide to borrow money. but even the big investors are nowhere in sight.

    • Your comment, John Robert only cemented the fact that the Gloria Arroyo administration produced very sensible economic policies when Gloria was on watch. The upgrades you mentioned cannot be PNoy’s handiwork knowing how economy works. As what Peter Wallace wrote in one of his previous articles in PDI, PNoy is very lucky that the economic policies of the previous administration(s) worked very well even if he did not do anything. A revealing admission from Wallace who is a well-known Arroyo hater and PNoy lover, so better stop giving credit to PNoy where it is not due him.

  5. wITH ALL due respect mga kababayan, marahil lahat ng government institution of our Philippine Republic were all receiving bribe money from this lunatic president. His policy is to bribe with peoples money , ang mga government officials and its department head, para lahat sila ay mapagtakpan ang kawalanghiyaan nitong moronic na presidente. Pera pera na lang ang katapat ng mga opisyales na ito.. and he will blame again to Marcoses and GMA…In short ito ang kanyang policy. TO BRIBE with peoples money..Milliones nga nmn ang usapan.Kahit pa abutin pa sila ng 100 years old hindi sila maghihirap na magnanakaw ng pera ng bayan….yaistst.

  6. Kindly note that per the records of the PSA the economy grew faster under GMA’s watch in current terms….2001-2010. The figures in constant terms are misleading since this is simply used to measure inflation. But government uses this growth rate in constant terms since the whole world is experiencing disinflation and deflation leading to massive money printing.

    The BSP records also reveals that in 2001 our foreign exchange reserves were at $15 billion. By the end of 2010 it was $60 billion…During the same period the BSP had to print pesos to buy dollars to prevent it from crashing here. The money supply grew and all one has to do is check the t-bill rates to see the effect of massive infusions of liquidity in the banking system. The BSP created the Special Deposit Accounts to rein in the tidal wave of domestic liquidity it itself created…

    The foundations of this massive liquidity was bequeathed to the new government of Aquino…But still in current terms his government lags in speed of growth…

    The government and BSP uses current term measurements for budget projections. Taxes are calculated based on current values with inflation embedded as this gives government additional revenue.

    The Aquino government did not create this conditions… But they failed to capitalize it to lessen poverty… The elite class is benefiting most from this…

  7. I always believe and I profess RP has a balance economy…50% true + 50% make believe. Whatever FDI level you want to enter in RP’s womb this is obliterated by the entries to the Filipina wombs. Billions worth of investment is no match to RP male libido…the population will erode everything. Best barometer is the need for classrooms for elementary students, yearly increasing. Make a linear comparison of this against delta change in FDI..try to see the shortfall. This is the sensitivity analysis our government must do. Very simple analytical tool no need to take up Master Degrees in Harvard, UP, Ateneo, Samson Tech…So make a decree to castrate all RP males and repeal such decree when the disparity in that linear equation is positive. Drastic measures for positive change….ECON 101 but with a twist

  8. The United Nations Conference on Trade and Development posted the same economic data that the World Bank posted but with a slightly higher figures. So those are lies too? But if I direct you to the FDI and External Financial Resources for the Philippines on the same website, you will find that the Arroyo administration depended heavily on OFW remittances to support its economic score card. From 2001 to 2009, her administration was getting 10.9% to as high as 13.2 % of the GDP which are not a direct result of her economic strategy. And also means that more Filipinos working abroad than domestically.
    I guess you want the Philippines to remain in the cellar among the Asian countries -such demoralizing attitude.

  9. Why would I believe Mr. Wallace and others when there is the World Bank and International Monetary Fund Financial Institutions that reported the improved economy of our country. I am sure they’re creditable institutions. The problem with you boys is you’re always negative and the problem is you’re not the one affected (because you’re paid or have interest) but the ordinary Filipinos like us OFWs. The negative reporting is the number one destroyer of economy. Ask George Soros. Regardless who is the President my friends..the fact of the matter is our economy is getting better and lets try to stir our country to the right direction. Mudslinging by politicians, writers and reporters will only destroy our country. There are more than 10 million OFWs and they are not dumb to know what is happening in our country.

    • Wow! I can see how hard you are defending your idol. Tell you what, OFW’s like you (if true of course) enjoy the BENEFIT of LESS Tax than us locally employed. So don’t shout about it Bro, you are less affected. Being negative supported by facts and figures, is good as it exposes the LIES that are being spread by this Yellow (expletive) President. If you DON’t AGREE, then BRING out your DATA. The lies about this foreign INVESTMENT are very true, you will ONLY need your eyes to see it, that is, if you are NOT a BLIND yellow follower.

  10. Bobo na! Magnanakaw pa! Traidor, sinugaling bengativo at Tamad. Ano ang mapapala sa isang ABNOY NA TULAD NI BULSHIT AQUINO? Kailangan Ikulong ya n sa Mandaluyong. Huwag isama sa ibang inmates baka Mahawa sila.

  11. Bert O. Romero on

    You asked the pivotal question : Indeed, what economic reform has this Aquino administration done to explain the unprecedented performance of the Philippine economy making it the second best economic achiever in the world?

    Or, is PNoy so lucky ( blessed may be sacrilegious ) just like his fortuitous ascendancy to the presidency that this present stunning Philippine economic performance was a result of past administrations’s economic policies and of benign international economic developments with PNoy once more the lucky recipient? As we Batanguenos would say, mabuti na ang ginagaling kaysa Sa magaling.

    Most definitely, the administration’s deliberate , bordering on the criminal , policy of underspending thereby depriving tens of thousands of unemployed Filipinos these past five years employment, however temporary, in infrastructure projects did’nt contribute to the country’s GDP. OFW remittance and incomes from BPO operations provided the private consumption component of the GDP all these years. And in the progress in these areas – OFW remittance and BPO operations – what value- added policy or reform has this administration contributed?

    How about the strengthening of the Philippine peso and the rise of the Philippine stock exchane index ? Just like the Philippine president, the Philippine peso and the PSEI was also the lucky recipient of the weakening of the American dollar since the 2008 financial crisis that originated in the US. It will be recalled that since 2008, the US Fed has maintained the policy of lower interest rate averaging less than one percent and quantitative easing, under which $80billion per month was released to the international market to help ease the US economic difficulties. Some of these US dollar found their way to the Philippines where the interest rate of between 2 and 3 percent is much higher than the US’. In addition , some of these American money are being temporarily parked in Philippine bonds and stocks which explain the unprecedented rise of the PSEI. Now, however, that American dollar has started to strengthen and that there are now speculations of the rise in interest rates in the US coupled by talks about the tapering of quantitative easing as indications of the growing overall improvement of the American economy, these explain the recent weakening of the peso and the fall of the PSEI. These also explain why the rate of FDI ( foreign direct investment which would have brought in factories and employment ) in the Philippines, which in the first place is the lowest among the ASEAN five, is lower than PDI or portfolio direct investment which involves temporary parking of excess funds looking for quick profits which can and are now being withdrawn and repatriated back to the US or transferred to other markets with better fundamentals and prospects.

    The low inflation rate of lower than 2 percent? It’s more a function of the lower global
    price of oil which even reached below $50 a barrel ! That being the case where the price of oil is the grandmother of all consumer goods whose production uses oil, the inflation rate should have been even lower.

    So instead of being the precursor of economic reform initiative, this PNoy administration, as shown by its deliberate policy of underspending, has impeded the country’s march to progress.

    • Here is another complicated story….blowing smoke. For ordinary people, the simple question is, Are we better off today than 10 years ago? Foreign Direct Investment is not the sole driver of economy! Agriculture, heavy industries, reduce importation from China of low quality products, increase reliance on indigenous resources, improve infrastructures, more scientist/engineers, less lawyers and less politicking but unite as people will help the country achieved what it wanted to achieve to be number one or two in whole asia. That’s how positive I am.

    • Mr. JRT can you please enumerate the infrastructures you and your idol are bragging.

  12. Leodegardo Pruna on

    The truth hurts but what else could we do except wait for 2016 and not be fooled anymore by an administration whose leader and men are simply out there to enjoy their lives by hook or crook. A BAD man, who in TV, by looks alone would not do good but BAD. God bless the Philippines.

  13. If indeed this present sitting inutile president in malacanang is a liar, isn’t it that a LIAR is the sibling of a THIEF?

  14. There is nothing to moderate from my comment. The figures from the Aquino administration came from World Bank. Are you going to hide the truth?

  15. What else but lies can be expected from the greatest designers of the Philippine “banana republic”?
    In all nations, whose guest I was, I have never seen such a huge power-hungry, bloated and stupid people.
    It is a brazen liar and corrupt leader of a criminal marauding gang.
    Aquino is the personification of a corrupt Spanish- Catholic conquistador, with the naivete of a primate.
    I know now a troubled and angry murmur will go through the room. But there are too many reasons that this is not just an assumption on my statement.
    The question is what foreign investors Aquino said that the Philippines are snake deliver to their millions.
    No foreigner with a common sense is in its current the Philippines – delight with investment funds’ Noynoy state “.
    The why not – is obvious.
    The relevant factors include not only the highest-risk uses of money (total loss is 60% – 80%), but also the fact that an investor and owner of the company in the Philippines can not be head of his own company.
    The nonsense that the investing foreigners must cede 60% of his company to a Filipino drives the idiocy on the palm. Is a shame that most people these are used far from below the level of education of the alien.
    In addition, a foreigner may not own land, no house or car. And so on.
    The following scenario is then typical Philippine Standard. The Filipino complains to the BI and thus robs the remaining 40% of the company.
    Then the criminal treatment of foreigners by the BI and DOJ needs to be mentioned!
    The laws which are aimed at 100% against foreigners are bent by corrupt criminals in BI and DOJ for the purpose of their personal enrichment in every direction imaginable.
    Now let us now reflect together on the incomplete mentioned issues.
    The Filipino character is a very difficult. The ability to distinguish “good from evil” unfortunately heard nor its distinctive characteristics as the speaking of truth. Does he have a little feeling of superiority, he is every, even the smallest opportunity to utilize the profit from this situation to beat for itself, in the form of extortion, robbery, falsehood, forgery and false imprisonment.
    Any foreigner who has experienced this Philippine martyrdom is, of course, more or less actively his business friends warn us all normal people from the Philippines.
    I think you could follow me so far in my remarks.
    Now show foreigners what they do to you. Namely nothing.
    The insulation of your island is an excellent way of retribution for wrongs.
    “- A tourists and businessmen-free zone The Philippines!”: If the corruption, the plundering of foreign nationals, the racism against foreigners is not the end, our goal will be as follows

  16. I really cannot understand how a President can grasp economics when his aptitude lies mainly in playing video games? What a joke!

    • Manuel Jaime jr on

      He does’nt have the brains to grasp the country’s economics.He’s just reading it,not knowing if its false or just plain lies.

  17. Of course, numbers can be played around. Everybody does that! But the true test is quality of life – are we secure in our own homes or in the streets? How fast are police forces respond to call for help from citizens? Are firefighters well equipped? How fair is our judicial system? Etc…

    From Batanes to Tawi-Tawi, do you think lives of Filipinos has improved? I don’t think so. One can see by just looking around that there are more poor people today than yesterday regardless of whether or not intra-company borrowings are included in net foreign direct investments. Politics is simply politics, nothing more, nothing less.

  18. Let’s remember that before Gloria stepped down from Malacanang, she said that she was laying down the foundation, so that the next president wouldn’t find it difficult running the country. in other words, inaani lang ni Noynoy ang mga tinanim ni Gloria. Mas malaki pa sana ang in-improve ng economy ng Pilipinas kung hindi si Noynoy ang naging presidente.

    • yes sir, i was in camp crame renewing the license of the company I am working with when then Pres. GMA said that she is laying down the foundation no matter how unpopular for a better Philippines for the next president to harvest.

  19. sir, can you help us obtain or at least point us to the sites where we can obtain the documents to support your details here?

    we want to help you reveal his lies convincingly.