More foreign funds seen to find way into RP

By Michelle Remo
Philippine Daily Inquirer
 
THE Philippines, like other emerging markets, will benefit from higher inflows of foreign investments in 2010, according to Moody’s Economy.Com.
 
“Portfolio inflows will continue to increase, boosting the stock market, while FDIs [foreign direct investments] are following, but with a lag and in a much milder fashion,” said Nikhilesh Bhattacharya, economist from the research firm Moody’s Economy.Com.

Latest data from the central bank showed that foreign direct investments registered a net inflow of $1.27 billion in the first nine months of 2009, up 7 percent from $1.19 billion in the same period the previous year.

On the other hand, foreign portfolio investments for January to October yielded a net inflow of $431 million. During the comparable period in 2008, regulators recorded a net outflow of $1.7 billion.

Rise in foreign capital inflows began in the middle of 2009 as investors, who were pushed at the sidelines due to the global economic crunch, found opportunities to generate income following early signs of recovery.

Analysts said emerging markets, including the Philippines, would benefit from the increase in foreign currency inflows because they proved to be more resilient than the industrialized nations which were badly hit during the global downturn.

Moody’s Econom.Com said the rise in inflows of foreign capital started to worry some policymakers in several emerging economies because of the impact on the exchange rate. The resulting appreciation of Asian currencies could make exports uncompetitive. Read more...