Foreign investments barely rise despite high PH growth
MANILA, Philippines – Foreign direct investments (FDIs) plunged in November and barely rose in the first 11 months of 2012, despite the Philippines’ stellar economic growth.
The Bangko Sentral ng PIlipinas (BSP) said Monday, February 11, net FDI inflows plunged 72.1% to $102 million in November 2012 from $366 million in the same month the previous year, bringing the 11-month tally to $1.2 billion, up by a measly 1.1%.
FDIs are capital foreigners put in the country to set up businesses or expand existing ones, spurring the creation of jobs.
Unlike “hot money” or portfolio investments, which go to stocks and bonds and which fly in and out of the financial markets easily, FDI inflows are usually for the long term.
Soaring FDIs and hot money are signs of investor confidence in the economy.
The lackluster FDI performance bucked the record-breaking rally of Philippine stock market as well as the Philippines’ high 6.6% growth in 2012—the second fastest in the region, next to China.
The BSP attributed the January-November FDI growth to net equity capital placements, which increased threefold to $1.3 billion from $469 million in the same period of 2011.
Most of the equity capital came from the US, Japan, Australia, the Netherlands and the British Virgin Islands. These investments were went to sectors such as manufacturing, real estate, wholesale and retail, mining and quarrying and financial and insurance sectors. – Rappler.com