You are on page 1of 2

Foreign Investments in PH Rose sharply in August

(Philippine Daily Inquirer 11 November 2015)

Long term foreign investments in the country rose sharply in August reaching their highest
monthly level for the year as multinationals pumped more cash into their local affiliates.

According to data from the Bangko Sentral ng Pilipinas (BSP), net inflow reached UsD 526 million,
the highest inflow of foreign direct investments (FDI) since Decemmber 2014. This registered an
increase of 76.3 per cent year-on-year.

The increase lifted the country’s eight month FDIs way above the long term historical average--
the equity capital placements coming largely from the United States, Japan, Singapore, Taiwan and
Ireland. These monies went mainly to manufacturing, real estate, wholesale and retail trade, and
information technology (I.T.) sectors.

When compared to neighbors in the region, the Philippines remains an underperformer in terms
of attracting foreign investments. However, with the FDIs received so far and the levels received every
year—these are indicator of the economy’s overall health because foreign investors are more likely to
make bets on countries that perform better.

Moreover, FDIs also contribute directly to a country’s job generation.

Adapt or Die

(Financial Times 5 November 2015)

In China, trade slow down caused manufacturers to be grateful just by being able to survive and
conduct business. Lack luster exports in the country, compounded by a worsening domestic market
caused enterprises to go bankrupt.

While they are accused of dumping on international markets, many Chinese metals producers
have already gone out of business themselves because of massive oversupply, a slowdown at home and
an uncertain global outlook.

Global demand remains weak, with Europe still struggling to emerge from years of crisis. The US
economy on the other hand has a tepid recovery while emerging markets such as Brazil and Indonesia
are struggling as China’s appetite for their commodities has waned.

The Chinese economy continues to decelerate, with annual gross domestic product growth
officially down to 6.9 per cent in the third quarter from double digits in the 2000s. Many analysts
question the official data and believe the real economic performance is actually much worse.

The BSP also noted that the total resources of banks expanded by nine per cent to Php 11. at nine per cent during the first half of the year. Further. continued expansion of resources and upbeat outlook on loans and investments. the country’s financial strength is best reflected by the banking system’s stable funding profile.9 billion in the first half. the banking system’s funding profile remained stable as retail and domestic oriented deposit liabilities continued to be the main source of bank funds.1 per cent to Php 68. with the US Federal Reserve itself concerned about growth in China and other emerging markets. Banks Stable amid shifts in Global Financial Scene (Business Mirror 5 November.9 per cent respectively. According to the Bangko Sentral ng Pilipinas (BSP). This negative feedback loop worries developed economies. Deposit liabilities also showed an expansion. The central bank explained that assets shifted and reflected banks’ risk- taking activities to maximize returns following the double-digit expansions in the investment portfolio of 13. seeing these factors as a threat to US recovery. .2 trillion at end June this year. 2015) The Philippine financial system remained well funded and stable in the first six months of 2015 no matter the significant changes in the economic landscape arising from global events during the period.3 per cent and loan portfolio of 12. The local lenders’ more upbeat performance in terms of loans and investments also proved beneficial as net profits grew by 8.