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FOREIGN
direct investments, which continued to flow inward on
net basis in the first two months, dropped by nearly 75
percent to only $327 million from year- ago of $1.28
billion, the Bangko Sentral ng Pilipinas (BSP) reported
Monday.
The
contraction is the best illustration of the ongoing
risk-averse mood of foreign fund managers not just of
the Philippines particularly as investment destination,
but of the Asia-Pacific region, in general.
The risk
aversion was fueled by fears of the impact of the
housing and credit crunch in the US on emerging-market
economies like the
Philippines.
There is
ongoing debate as to whether or not the feared slowdown
would be deep but short or long but shallow or a
combination of both.
In any
case, foreign direct investments, which are actually put
to work as equity in many long-haul projects and
programs in the country, dropped to only $327 million in
the first two months this year from year ago of $1.28
billion and $435 million in 2006.
BSP
Governor Amando M. Tetangco Jr. said in a statement that
actual FDIs in February accelerated a bit to $194
million from only $133 million the previous January.
“All FDI
components posted net inflows during the first two
months, despite foreign investors’ generally cautious
stance amid global economic uncertainties.
“Consistent with the moderation of capital of capital
flows to many emerging countries, the net FDI inflows
were lower than the level posted during the same period
last year due to concerns on global economic slowdown,”
Tetangco said. He noted the FDI flows to the
Philippines
last year came from a high base due to a large-scale
investment in a local firm.
In the
first two months this year, net equity placements
totaled only $124 million and contrasted sharply from
year-ago total of $590 million or even from 2006 level
of $184 million. |
