HOT MONEY POSTS DROP AT THE HEIGHT OF 'GLORIAGATE'

MANILA, July 18, 2005
 (BULLETIN) By Maricel E. Burgonio, Reporter - FOREIGN investments in the stock exchange, government securities, among others, posted a significant drop during the first week of July, owing to allegations that President Arroyo cheated in the last election and that members of the her family, including a presidential brother-in-law, were among the recipients of payoffs from an illegal numbers game.

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said the government securities registered a net outflow of $50 million while only posting a net inflow of $28 million in the first week of July.

“For one week, the portfolio investments decreased to negative $58 million,” Tetangco said.

During the same period, BSP data also indicated that net inflows, worth $71.4 billion, were lower than the outflows which reached $130.1 billion.

However, the total net portfolio investment has improved to $1.878 billion in January to first week of July this year compared with last year.

In 2004 net portfolio investments only amounted to $486.8 million. In 2005 the BSP expects net portfolio investments to reach more than $3 billion due to improvement in economic fundamentals and fiscal reform.

However, the suspension of the new value-added tax law has made investors doubt whether the government could still accelerate its fiscal consolidation program.


Reported by: Sol Jose Vanzi

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