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Foreign infusions dip 83.4% to $194M in Feb.

By Ruben Hortelano

05/13/2008

Net foreign direct investments (FDI) fell 83.4 percent to $194 million in February from a year earlier, as a result of foreign funds leaving the country due to uncertainties created by a credit crisis in the US global markets.

FDI in the first two months dropped to $327 million, 74.5 percent lower than the $1.28 billion a year ago.

Net equity capital inflows were at $31 million in February against $93 million in January and $599 million a year earlier.

The investments came mostly from the United States, Japan, Malaysia and South Korea. These were channelled into the manufacturing, services, mining, construction, real estate and financial sectors, Bangko Sentral ng Pilipinas (BSP) data showed.

The BSP expects foreign direct investment to reach $4.2 billion this year from $2.7 billion in 2007 despite global uncertainties, as investments in the mining, shipbuilding and construction sectors take off.

Analysts said the fall reflects the risk aversion mood among fund managers on the Asia-Pacific region.

BSP Gov. Amando Tetangco Jr. said 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.

Gross equity placements were poured unto the manufacturing sector, into services, mining, construction, real estate and financial institutions.

The bulk of it came from the United States, Japan, Malaysia and South Korea, Tetangco said.