PALACE CITES STRONG PESO, FOREIGN DIRECT INVESTMENTS (FDIs)
MANILA, APRIL 12, 2007 (STAR) By Marvin Sy - Malacañang welcomed yesterday the continued strength of the peso and the increase in foreign direct investments (FDIs) as two positive indicators showing the strength of the economy.
The peso broke into the 47-to-$1 territory for the first time in six years last Tuesday, closing at P47.95.
Net FDI, on the other hand, went up to $357 million in January this year from P237 million the previous year.
"Among many other factors, FDIs and the strong peso are boosting us," Bunye said.
Malacañang said that the strength of the peso was due to strong overseas Filipino workers’ remittances which have consistently kept the currency up in spite of various external shocks.
The Bangko Sentral ng Pilipinas (BSP) also attributed the strength of the peso to heavy foreign investments in the Philippine bond and stock markets or what is more commonly known as portfolio investments or "hot money."
Unlike FDIs, portfolio investments tend to be more volatile and could be taken out of the country at the first sign of trouble.
"FDIs are markers of global confidence while the strong peso is the handiwork of Filipino excellence and patriotism exemplified by our OFWs," Bunye said.
Bunye said the government is committed to keep up the safeguards that are already in place to protect the country’s exporters from the effects of a strong peso and to drive up the tempo of domestic investments.
GMA’s China visit seen to attract $2B in investments for RP By Ma. Elisa P. Osorio The Philippine Star 04/12/2007
The government is expects to get at least $2 billion trophy investment from the President’s state visit to China next week, Trade Secretary Peter B. Favila said yesterday.
In an interview, Favila said that there are a number of proposals submitted to the government. "In every city there are proposals," Favila expounded. President Arroyo and her delegation are expected to visit five cities.
Favila said there are groups interested in investing in infrastructure, agriculture and mining.
The secretary likewise noted that they will focus on capital investments rather than concessional loans. "Concessional loans shifts our focus on capital investments other than concessional loans."
"I met with the new president of federation (Chinese Chamber President John K. Tan). Our new strategy so far as investment is I want solid investment rather than rely on loans because we have to manage our fiscal program," Favila explained.
In January, the Chinese and Philippine government signed a loan agreement worth over $1 billion to finance various priority projects of the government.
Socioeconomic Planning Secretary Romulo L. Neri said a memorandum of understanding (MOU) worth $500 million was signed for the development of key infrastructure projects. According to Neri, the National Economic Development Authority (NEDA) where he sits as Director General, will recommend where the money will be allocated.
"Most likely it will be for the Southrail and other water supply projects," Neri explained.
Southrail is a multi-million project linking Calamba, Laguna and Lucena, Quezon. It involves the rehabilitation of railroads and the purchase of electric and diesel trains.
Another $500 million loan agreement is for the continuation of the Northrail project. The Chinese government is financing 83 percent of the country’s Northrail project through official development assistance (ODA) under the Chinese Concessional Loan, while the rest will come from local and foreign commercial loans.
The Chinese government will likewise provide $100 million to bankroll the Non-Intrusive Container Inspection System Project, Phase 2 under a framework agreement. Under the framework, the two governments will discuss which projects to undertake under the concessional loan package.
More importantly, Neri said a P100 million grant will be given for the formulation, promotion and implementation of projects under the Agreement on Economic and Technical Cooperation between the two countries.
Chief News Editor: Sol Jose Vanzi
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