INTERNATIONAL SURVEY SHOWS PHILIPPINES AN INVESTOR PARIAH

MANILA, JANUARY 2, 2012 (MANILA TIMES) GLOBAL executives are considering investing in Southeast Asia, except in the Philippines, according to a consulting firm’s international survey.

In its 2012 Foreign Direct Investment Confidence Index, A.T. Kearney said the Philippines was excluded from the top 25 economies considered attractive FDI destinations this year.

Neighboring countries like Singapore placed 7th; Indonesia, 9th; Malaysia, 10th; Vietnam, 14th; and Thailand, 16th. The most attractive countries are China, India, Brazil, the US, Germany and Australia.

The FDI index examines future prospects for investment flows as the world seeks to recover from the global recession and continued economic uncertainty in Europe and the United States.

Respondents in the survey include C-level executives and regional and business heads. Participating companies represent 27 countries and span 17 industry sectors and account for more than $1 trillion in annual global sales. The survey was conducted between July and October 2011.

“We find that FDI flows have picked up slightly in the past two years as investors cautiously reenter the markets. However, this modest optimism could quickly revert to retrenchment as investors weigh potential upside opportunities against downside risks,” AT Kearney said.

The report added that the prospects for near-term recovery are still shaky more than three years since the onset of the global economic crisis, and debt crises loom large. With prospects for near-term economic recovery increasingly uncertain, AT Kearney said FDI flows may not see the pickup that the world was hoping for any time soon.

“The timing and location of renewed investment will play a major role in the future global economic landscape. Emerging markets are poised to benefit from an FDI recovery, as they comprise more than half of the FDI Confidence Index’s top 25 countries. They are attracting investment on their own merits, most importantly their large and growing consumer markets,” the report added.

The report, which first appeared in 1998, assesses the impact of political, economic, and regulatory changes on the FDI intentions and preferences of the leaders of top companies around the world.

Lower rates may pressure banks’ margins Published : Monday, January 02, 2012 00:00 Article Views : 101 Written by : Lailany P. Gomez MANILA TIMES

The Bangko Sentral ng Pilipinas said banks’ margins could be under pressure this year mostly because of lower interest rates.

“At low levels of interest rates, there could be pressure on banks to achieve profitability through increased trading gains. There may also be temptation for them to chase after yields,” BSP Governor Amando Tetangco Jr. said.

The policy-making Monetary Board has been maintaining its policy rates at 4.5 percent for the overnight borrowing and 6.5 percent for the overnight lending since May.

The Board’s decision was based on its assessment that the inflation outlook continued to be manageable, with within-target headline inflation and well-contained inflation expectations.

Latest baseline forecasts indicated that the annual inflation rates for 2011 to 2013 were likely to fall within the 3-percent to 5-percent target range.

“Given these, the BSP actively monitors the exposures of banks to ensure that they remain safe and sound,” Tetangco said.

Data from the BSP showed that as of the first half of 2011, consolidated net profits of the banks grew by 28 percent to P51.9 billion from P40.6 billion in the same period in 2010.

Similarly, total resources grew by 11.5 percent to reach P7.018 trillion in the first half from P6.295 trillion recorded a year ago. Total resources remained funded by deposit liabilities (73.5 percent) and owner’s capital (12 percent).

Core lending—total loan portfolio net of interbank loans and reverse repurchase with BSP and other banks—posted a double-digit growth of 17.1 percent to P3.043 trillion from P2.599 trillion a year ago. The BSP said that the growth was almost twice the recorded expansion of 8.5 percent last year.

Moreover, banks’ have improved loan and asset quality, with key rations back of their pre-crisis levels as non-performing loan ratio further eased to 3.1 percent from year ago’s 3.9 percent. NPA ratio, meanwhile, also improved to 3.6 percent from 4.4 percent a year ago. This was backed by adequate loan loss provisioning, the BSP said.

“Over the years, the BSP has put in place various regulations that require banks to improve risk management practices and infrastructure, including the adoption of ICAAP to help ensure that banks allocate sufficient capital for risk activities undertaken,” Tetangco said.

To maintain market confidence, enhance openness in financial transactions and mitigate systemic liquidity risks, the BSP said it will continue to upgrade the banking system’s compliance with international standards and best practices following the early adoption of the Basel III.

The BSP is also promoting financial stability through periodic stress tests, industry consolidation and closure of weak financial institutions.

“The Philippines has stayed above the fray of global difficulties because our banks have the discipline of maintaining credit standards and being cognizant of evolving risks. We expect no less moving forward,” Tetangco said.


Chief News Editor: Sol Jose Vanzi

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