Foreigners pulled out more money than they invested in job-generating businesses at the close of the first half of the year, data released today by the Bangko Sentral ng Pilipinas (BSP) showed.
In a report, the BSP said the country suffered from $61 million in net outflows of foreign direct investments (FDI) last June, a reversal of the $307 million net inflows in the same month last year.
Despite the net pullout of investments last June, the country still enjoyed net inflows of $2.2 billion in the first six months of the year. This was 10.9 percent more than the nearly $2 billion in net inflows in the same six-month period last year.
In June alone, all categories of FDI registered weaker growth, if not contracted altogether. Equity capital reversed to net outflows of $193 million from last year's net inflows of $78 million.
Reinvested earnings fell sharply from $123 million in June last year to $59 million in the same month this year. Likewise, loans that foreign companies granted their local subsidiaries or affiliates fell from $106 million in 2012 to $72 million this year.
The government has been counting on the country's credit rating upgrade to fuel inflows of brick-and-mortar investments. Two of the world's three major rating firms lifted the Philippines to investment grade.
Fitch was the first to upgrade the Philippines, followed by Standard and Poor's, leaving Moody's as the only rating firm that has yet to deliver an increase in the country's debt score. Investment grade confers lower borrowing costs for a country, thus leaving it more resources to finance economic growth.
source: interaksyon.com
