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12 December 2009
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Philippines: FDI in Jan-Sep totals $1.3bn

Philippines has registered foreign direct investment (FDI) inflow of $1.3 billion in the first nine months, about $200 million shy of the full-year goal of $1.5 billion, reported Business Mirror, an online daily.

Bangko Sentral ng Pilipinas (BSP) – Philippines Central Bank - governor Amando Tetangco Jr. said on Thursday this was 6.8 percent higher than a year earlier and made possible by stronger equity capital and higher volumes of reinvested earnings.

He also reported an 11-month turnaround in “hot money” which flowed out on net basis last year but posted $431.42 billion in net inflows thus far this year.

Both are testament to the country’s attraction as investment haven in recent months and a validation that previously gun-shy investors have indeed returned to emerging markets like the Philippines.

Flighty hot money flows, for instance, reverted to net inflows of $431.42 billion in 11 months from year-ago outflows totaling $1.702 billion, as foreign fund managers uprooted investments as the global financial crisis deepened and returned to safe haven destinations like the United States.

This time, however, portfolio outflows totaled only $5.441 billion against inflows of $5.873 billion, driven in the main by the desire to profit from vibrant emerging markets.

A year ago in November, outflows totaled $9.682 billion against inflows of only $7.979 billion.

As for FDI, Tetangco said there were modest placements in gross-equity capital in the first nine months totaling $1.5 billion, actually 20.6 percent higher than a year earlier.

The bulk came from the United States, Japan, Hong Kong and the Netherlands and invested in manufacturing, real estate, construction, services, financial intermediation, mining, trade/commerce and the transport/storage/communication sectors.

“Reinvested earnings also posted a net inflow of $114 million, a rebound from year-ago net inflow of $75 million as investors continued to retain profits/earnings in local enterprises,” Tetangco said.

“The other capital account, consisting mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries or affiliates in the Philippines, recorded a net outflow of $164 million from a $219-million net inflow during the comparable period in 2008.

“The outflows were mainly intercompany loan repayments to foreign direct investors and higher trade credits extended to parent companies abroad,” Tetangco said. 



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