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THE
investment environment is more challenging this year and
has forced the Bangko Sentral ng Pilipinas (BSP) to
prune its net foreign direct investments (FDI) target of
$4.2 billion to $2.6 billion.
Maria
Cyd Tuano-Amador, managing director of the BSP’s
monetary-policy subsector, affirmed the reduction on
Thursday in a briefing on the balance of payments (BOP).
Amador
bared a similar reduction in this year’s
portfolio-investments forecast of $3.2 billion to a net
inflow of $1.1 billion.
As a
result, the country’s BOP would also narrow down to a
surplus of $2.5 billion from an earlier forecast of $3.4
billion.
“The
financing conditions have changed, in part owing to a
global credit crunch/credit squeeze. This much tougher
environment will impact on our foreign direct
investments,” Amador said.
Mining
equity investments previously forecast at handsome
levels have been cut to $905 million this year from more
than $1 billion, Amador said.
Foreign
intent to engage not only in mining but in
business-process outsourcing, service companies and in
manufacturing have been temporarily put on hold until
the global economic uncertainties have sufficiently
cleared, she added.
The
government favors FDIs that are poured into brick and
mortar endeavors than volatile portfolio or “hot money”
investments that fly out the country at the slightest
hint of trouble or promise of better returns elsewhere.
The net
inflow of hot money would amount to $1.1 billion this
year from $3.2 billion as originally predicted,
according to Amador.
As a
result, the BOP surplus of $3.4 billion this year was
recast to $2.5 billion.
The BOP
during the first quarter was 20.8- percent wider at a
surplus of $1.7 billion from a year earlier.
The
current account, which measures the net flow of trade,
was in a surplus position of $1.2 billion, or 2.9
percent of the gross domestic product.
The
capital and financial account that keeps track of the
flow of investments remained in a surplus of $86 million
for the period, or 78 percent less than the $403 million
a year earlier.
The BSP
projects gross international reserves to reach $37
billion for the year. |
