Jan.-April foreign direct investments fall 49.2%

Foreign direct investments (FDIs) dropped substantially during the first four months of the year, Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. said Monday. Due to lower equity capital placements, FDI inflows dipped by 49.2 percent to $481 million from January to April from $947 million in the same period last year, Tetangco said. Data showed that in April alone, FDIs plunged by 86 percent to $85 million from $613 million a year earlier. "The substantial drop in FDI inflows in April could be attributed to a significant number of shares by a foreign enterprise in a local beverage manufacturing firm in April last year," Tetangco said. Japanese brewer Kirin Holdings spent P65.8 billion in February and April last year when it acquired a stake in Manila-based San Miguel Brewery of diversified conglomerate San Miguel Corp. The BSP chief said the FDIs continued to flow into the country amid the faltering global economic recovery. "While FDI posted lower year-on-year net inflows owing to challenges posed by uneven pace of economic recovery across the globe, the country continued to be a recipient of foreign funds given its favorable macroeconomic fundamentals," Tetangco said. Some say that the debt crisis in Europe as well as the wait-and-see attitude adopted by investors in light of the May 10 elections affected the inflow of FDIs in the first four months of the year. FDI inflows, according to analysts and economists, would further improve over the next few months after the success of the country's first-ever automated elections. FDI inflows went up by 26.2 percent to $1.95 billion last year from $1.54 billion in 2008 on the back of strong equity inflows as investors continued to plough back earnings into Philippine-based units. The BSP now expects FDI inflows at $2 billion instead of $1.8 billion from $1.95 billion last year. Earlier, Tetangco said the country's gross international reserves (GIR) would hit a range of $49 billion ot $50 billion instead of the revised $48 billion to $49 billion this year from a record level of $44.24 billion last year. Inflows of foreign portfolio investments or "hot money" hitting $2.9 billion this year or 747 percent higher than the $388.02 million registered in 2009 while remittances from overseas Filipinos would grow by eight percent instead of six percent this year from $17.35 billion last year. —Jesse Edep/OMG/VS, GMANews.TV