Global devts hurt FDI, says Bangko Sentral

Sluggish growth in the United States and Japan as well as the ongoing debt crisis in Europe have hampered foreign direct investments (FDI) in the Philippines which fell by 15.1 percent in the first four months of the year, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday. FDI inflows from January to April totaled to $552 million, or $98 million lower than the year earlier net inflows. In April alone, the BSP said net FDI inflows fell 4.7 percent to $81 million while equity placements contracted by 56 percent to $29 million. "[The FDI rate in the period fell] owing to the prevailing cautious investor sentiment amid heightened uncertainties, as a result of the euro zone sovereign debt crisis in some parts of Europe and the social unrest in the Middle East and North African region," BSP Gov. Amando Tetangco Jr. said in a statement. Similarly, equity placements during the period fell by 23.9 percent to $150 million, while withdrawals dropped by 48.4-percent to $49 million from $95 million. Tetangco, however, said the country continued receiving foreign funding "on account of its strong macroeconomic fundamentals and favorable growth aspects." The BSP said the country's major sources of FDIs are the US, Singapore, Hong Kong, Japan and the Netherlands. Most of the FDIs were placed in the real estate, mining, manufacturing, wholesale and retail trade, utilities and construction industries. Inter-company borrowing between foreign investors and their local subsidiaries fell by 20.7 percent to $283 million, with reinvested earnings scaled down by 12 percent to $168 million. — JMT/VS, GMA News