|
EMERGING
markets like the
Philippines
would suffer from reduced foreign inflows this year, the
Bangko Sentral ng Pilipinas (BSP) said on Friday.
The
volume of inflows would continue and not dry up
altogether, but would markedly be lower this time
around, said BSP Governor Amando Tetangco Jr.
“Investors would adjust based on their risk preferences.
But the emerging markets are expected to be resilient
and would therefore continue to be attractive to real
money investors,” he said in an e-mail message.
His
views were sought on the likelihood of foreign funds
flowing out of emerging markets for the long haul as a
result of the housing problems and subsequent credit
crunch in the
US.
Risk-averse fund managers have pulled out of emerging
markets as the subprime credit crunch deepened.
The BSP
prepared for its impact by anticipating a
balance-of-payments surplus of only $3.4 billion this
year versus $8.6 billion last year.
On
Thursday, however, BSP Deputy Governor Diwa Guinigundo
said that foreign funds may have returned sooner than
earlier anticipated.
“We’re
seeing it, the positive intensification of capital flows
that previously reverted to the
US
market,” he said.
His
optimism was driven by latest reports and analysis
indicating the feared recession in the
US
was not going to be broad-based, after all, and that the
stand of the US Federal Open Market Committee and the
anticipated impact of its fiscal-sector stimulus package
have achieved their intended impact.
Previously, the Asian Development Bank (ADB) said the
rather large net outflow of foreign capital in recent
months that have squeezed countries like the Philippines
were to return once financial stability was restored.
The head
of regional economic integration at the ADB, Masahiro
Kawai, said investor confidence on emerging markets
should return within six months up to one year from now.
Kawai
was reported as saying investors would revert to
investing in emerging markets like the
Philippines
again and shun the US market whose economy was seen to
“stagnate for several quarters.” |
