(FDI) FOREIGN DIRECT INVESTMENTS SURGES 4-FOLD TO $597 M IN APRIL 

Foreign direct investments rose fourfold in April as the country’s strong macroeconomic fundamentals continue to attract investors, the Bangko Sentral ng Pilipinas reported yesterday. Net FDI inflows amounted to $597 million in April, four times the $149 million recorded in same period a year ago, driven largely by inter-company borrowings or investments of foreign firms in papers issued by their local units. Placements in debt instruments surged to $518 million during the month from $23 million last year, while reinvested earnings also climbed 26.2 percent to $80 million. However, equity capital investments made by foreign firms in their Philippine units dropped 37.4 percent to $79 million in April as more withdrawals were made during the period. These funds came largely from the US, Japan, Singapore, the United Kingdom, and Germany and were put into real estate; financial and insurance; accommodation and food service; and transportation and storage activities. In the first four months of the year, net FDI inflows amounted to $2.449 billion, 9.1 percent higher than the $2.245 billion recorded in the same period last year. “The sustained increase in net inflows continued to reflect strong investor confidence in the country’s solid macroeconomic fundamentals,” the BSP said. * READ MORE...

ALSO: 'Booming Philippine economy fruit of Arroyo admin, not PNoy's'   - Financial Times 

The country's remarkable growth in recent years was attributed by a foreign newspaper to adjustments made by the Arroyo administration despite its unpopularity. In a commentary on Friday, the Financial Times' David Pilling allayed fears of the effect of the end of President Aquino's term, saying he is not exactly the key to the stability of the above 6 percent economic gains of the Philippines. "In truth, some of the macro-economic improvements have been the fruit of policy changes outside his administration, particularly at the central bank," the British expert on Asian economy said. "Although his predecessor, Gloria Macapagal Arroyo, was deeply unpopular and accused of overseeing a corrupt administration, much of the improvement in economic fundamentals can be dated to her government," he added. Pilling noted that economic policies under Aquino's watch did not primarily drive the macroeconomic improvements marked by the debt and investment upgrades. He cited overseas Filipino workers' remittances and strong domestic demand that insulate the country from downturns of external economies. The Philippines is also entering what Pilling calls a "demographic sweet spot" driven by the large number of young people and their expected productivity in the workforce. * READ MORE...

(ALSO) FROM DTI: Investment Statistics  

The Philippines is "the place to be for investments" due to the following reasons:
•Generally liberalized services industry;
•Cost-efficient in terms of wages over labor standard expectations ratio and low operational costs;
•Strategic logistics access point in ASEAN + 3;
•Natural pool of talents and culturally adaptable human resources that foreign investments look for particularly in the Knowledge and Business Processing industries;
•Strong remittances build gross international reserves to comfortable levels above international benchmark levels, thus buoy up surplus on balance of payments; and
•Committed and supportive governance. You may also find relevant data here. *Source of basic info: Board of Investments (BOI), Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA), and Clark Development Corporation (CDC). Consolidated by the National Statistical Coordination Board (NSCB) for the Quarterly Foreign Direct Investments (FDI) Report published by the NSCB in cooperation with the Inter Agency Committee on FDI Statistics (IACFDIS).THIS IS THE FULL REPORT.

ALSO By Boo Chanco: It stinks but it’s not the garlic 

The sudden spiraling of garlic retail prices to over P350 a kilo sparked a Senate hearing but doubts have been expressed that anything significant was uncovered despite the headlines afterwards. A reader sent me this reaction that I found interesting and rather plausible: “Hindi lalabas sa Senate hearing ang tunay na dahilan sa pag taas ng presyo ng bawang dahil sangkot ang mga kausap nila sa hearing. Alangan na isangkot nila ang sarili nila. “Sumobra na ang katakawan ng DA-BPI at sa Customs din dahil daw sa increased risk with the new commissioner. Eh nag tatakipan ang traders at nililinlang ang attention ng publico. “Ang tinuturo nila ang middleman at retailers para malihis sa kanila ang init at inaantay na lang lumipas ang problema. Malaking pera ang pinag uusapan dito sa loob nag DA-BPI, Customs at brokers!” Hmm… something stinks and it isn’t the garlic. Then again, maybe Food Security Chief Kiko Pangilinan already knows what is going on there. Supposedly, no one can import garlic without an import authority from the Bureau of Plant Industry (BPI). Is this why the Director of the BPI was replaced last week? * READ MORE...


READ FULL MEDIA REPORTS:

FDI surges 4-fold to $597 M in April


MAKATI, PHILIPPINES

JULY 14, 2014 (PHILSTAR) By Kathleen A. Martin - Foreign direct investments rose fourfold in April as the country’s strong macroeconomic fundamentals continue to attract investors, the Bangko Sentral ng Pilipinas reported yesterday.

Net FDI inflows amounted to $597 million in April, four times the $149 million recorded in same period a year ago, driven largely by inter-company borrowings or investments of foreign firms in papers issued by their local units.

Placements in debt instruments surged to $518 million during the month from $23 million last year, while reinvested earnings also climbed 26.2 percent to $80 million.

However, equity capital investments made by foreign firms in their Philippine units dropped 37.4 percent to $79 million in April as more withdrawals were made during the period.

These funds came largely from the US, Japan, Singapore, the United Kingdom, and Germany and were put into real estate; financial and insurance; accommodation and food service; and transportation and storage activities.

In the first four months of the year, net FDI inflows amounted to $2.449 billion, 9.1 percent higher than the $2.245 billion recorded in the same period last year.

“The sustained increase in net inflows continued to reflect strong investor confidence in the country’s solid macroeconomic fundamentals,” the BSP said.

* The Philippine economy grew by a slower-than-expected 5.7 percent in the first quarter but government officials are optimistic the 6.5- to 7.5-percent full-year goal is still within reach.

Inflation has also remained within the three to five percent target range, and the country’s external profile remained robust with surpluses recorded in the balance of payments.

Inter-company borrowings during the four-month period rose 42 percent to $1.55 billion, while reinvested earnings went up 1.3 percent to $265 million.

Equity capital, however, fell 22 percent to $900 million as of April. The funds, which came primarily from the US, Hong Kong, Japan, Singapore and Taiwan, were invested in financial and insurance; real estate; manufacturing; wholesale and retail trade; and mining and quarrying activities.

Last year, net FDI inflows increased 20 percent to $3.86 billion, surpassing the central bank’s $2.1-billion target for 2013.

'Booming Philippine economy fruit of Arroyo admin, not PNoy's' (philstar.com) | Updated July 11, 2014 - 5:03pm 42 2382 googleplus0 4


In this 2011 photo, Benigno Aquino III, who served as senator before becoming president, shares a light moment with then President Gloria Macapagal Arroyo. AP file

MANILA, Philippines — The country's remarkable growth in recent years was attributed by a foreign newspaper to adjustments made by the Arroyo administration despite its unpopularity.

In a commentary on Friday, the Financial Times' David Pilling allayed fears of the effect of the end of President Aquino's term, saying he is not exactly the key to the stability of the above 6 percent economic gains of the Philippines.

"In truth, some of the macro-economic improvements have been the fruit of policy changes outside his administration, particularly at the central bank," the British expert on Asian economy said.

"Although his predecessor, Gloria Macapagal Arroyo, was deeply unpopular and accused of overseeing a corrupt administration, much of the improvement in economic fundamentals can be dated to her government," he added.

Pilling noted that economic policies under Aquino's watch did not primarily drive the macroeconomic improvements marked by the debt and investment upgrades.

He cited overseas Filipino workers' remittances and strong domestic demand that insulate the country from downturns of external economies.

The Philippines is also entering what Pilling calls a "demographic sweet spot" driven by the large number of young people and their expected productivity in the workforce.

* While many projections indicate that the Philippine economy will continue to grow beyond this administration—some even expect one faster than China—foreign observers are alarmed by the high poverty rate still plaguing the nation.

The Asian Development Bank (ADB) said that the challenge is to translate "solid economic growth into poverty reduction by generating more and better jobs."

"Reflecting the lack of good jobs, the poverty rate was 25.2 percent in 2012, only a small improvement on 26.3 percent in 2009," the organization said in its 2014 outlook report.

Another nagging constraint is poor infrastructure, ADB said.

"The Philippines ranks behind most major Southeast Asian countries in terms of infrastructure," the report noted. - Camille Diola

FROM DTI (DEPARTMENT OF TRADE & INDUSTRY


http://www.dti.gov.ph/splash.php

Investment Statistics

The Philippines is "the place to be for investments" due to the following reasons:
•Generally liberalized services industry;
•Cost-efficient in terms of wages over labor standard expectations ratio and low operational costs;
•Strategic logistics access point in ASEAN + 3;
•Natural pool of talents and culturally adaptable human resources that foreign investments look for particularly in the Knowledge and Business Processing industries;
•Strong remittances build gross international reserves to comfortable levels above international benchmark levels, thus buoy up surplus on balance of payments; and
•Committed and supportive governance.

You may also find relevant data here.

*Source of basic info: Board of Investments (BOI), Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA), and Clark Development Corporation (CDC).

Consolidated by the National Statistical Coordination Board (NSCB) for the Quarterly Foreign Direct Investments (FDI) Report published by the NSCB in cooperation with the Inter Agency Committee on FDI Statistics (IACFDIS).

FROM PHILSTAR

It stinks but it’s not the garlic DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) | Updated July 14, 2014 - 12:00am 0 2 googleplus0 0


 By Boo Chanco

The sudden spiraling of garlic retail prices to over P350 a kilo sparked a Senate hearing but doubts have been expressed that anything significant was uncovered despite the headlines afterwards. A reader sent me this reaction that I found interesting and rather plausible:

“Hindi lalabas sa Senate hearing ang tunay na dahilan sa pag taas ng presyo ng bawang dahil sangkot ang mga kausap nila sa hearing. Alangan na isangkot nila ang sarili nila.

“Sumobra na ang katakawan ng DA-BPI at sa Customs din dahil daw sa increased risk with the new commissioner. Eh nag tatakipan ang traders at nililinlang ang attention ng publico.

“Ang tinuturo nila ang middleman at retailers para malihis sa kanila ang init at inaantay na lang lumipas ang problema. Malaking pera ang pinag uusapan dito sa loob nag DA-BPI, Customs at brokers!”

Hmm… something stinks and it isn’t the garlic. Then again, maybe Food Security Chief Kiko Pangilinan already knows what is going on there. Supposedly, no one can import garlic without an import authority from the Bureau of Plant Industry (BPI). Is this why the Director of the BPI was replaced last week?

While the relieved official denied his relief had anything to do with the garlic problem, the timing is suspicious. It came while the administration is trying to clean up its act on the garlic price explosion. Could he be a scapegoat sacrificed to give the public the impression the administration is doing something?

The need for an import authority for garlic or any other agricultural commodity for that matter ought to be scrapped. It seems to be at the root of our current problems not just with garlic and rice but other food essentials as well. This practice breeds corruption.

The import restriction policy had long been justified as a means to help our farmers who will be unable to compete with imports that are a lot cheaper even if duties are imposed. But decades of such protection have not made our farmers any more competitive.

Without denying the need to help our farmers, there is also the need to help our consumers. Somehow, our food consumers who are mostly in the urban areas have been sacrificed with higher food costs. That would have been okay as a temporary measure to help our farmers but this situation cannot go on forever. Food claims a big portion, as much as half in some cases, of the urban consumer’s disposable income.

High food costs for our urban based workers translate to higher labor cost that is a strong contributing factor to our lack of industrial competitiveness. Lower food costs resulting in lower labor costs have been big factors in Thailand being able to industrialize faster than us over the last three decades.

Faster industrialization provides a country like ours (or Thailand) the ability to create entry level jobs for workers moving out of the farms. More job creation means a greater ability to lift more people out of poverty.

If we want to help our farmers, it will have to be more in terms of direct government support rather than import restriction. Farm to market infrastructure, technology, fertilizer and marketing support funded from duties imposed on imported farm products are perhaps going to be more effective in helping farmers than current import restrictions.

How Taiwan became a world class producer of garlic, vegetables and other farm products is not a secret. Indeed, Filipino agriculturists from UP Los Banos helped them, the most notable of them is former UP President Emil Javier. Is it so difficult for the Department of Agriculture to use UP Los Banos technology to make our garlic and other farmers competitive?

In any case, the current system of requiring an import authority from the Bureau of Plant Industry is obviously not working. Worse, it is at the root of corruption in the bureaucracy and as what happened over the past month, resulted in an abrupt rise in garlic prices.

Any observer can quickly see the failure of DA/BPI to properly plan importations anyway, a justification for the import authority they issue. They have the demand and supply statistics that have not really changed much through the years. They know the harvest months to avoid landing those imports and the lean months when the imports are sorely needed. So, what happened?

Either they are sleeping on the job or there is some criminal collusion among bureaucrats and traders to cause such a high price that amounts to profiteering. Whatever it is, it only proves the system not only doesn’t work, it stinks.

Indeed, the e-mail writer also revealed the practice of using import permits several times, which negates the value of such a restriction. One other means of paying lower taxes the e-mail writer pointed out, is to pay the 40 percent tax under protest. Then, once they complete the volume they want, they show a Bill of Lading saying the cargo was shipped at -3 degrees C or below freezing and the tax is just five percent. It is a bad situation begging for reforms and hopefully, our officials are ready to clean things up for good.

With imports accounting for over 80 percent of our garlic demand, a better system is to open up importation to whoever may want to do so. Charge them duties that can be used initially to subsidize local producers so they can compete in the market.

When market forces are allowed to work, an equilibrium will happen that works for everyone’s good. It is when government interferes in a way that is also corruption ridden that bad situations like what we have now happen.

Our situation now is so ridiculous. Because of the extraordinarily high price of garlic in the local market, it has become a popular “pasalubong” among Filipinos coming home from Qatar, a media report indicated.

Filipinos from Qatar are now bringing garlic home in their suitcases and balikbayan boxes. Garlic in Qatar only cost P72 per kilo, way lower than the P300 to P400 per kilo in Metro Manila markets. And I don’t suppose they grow garlic in Qatar.

Sen Cynthia Villar, chair of the Senate committee on agriculture and food said the production cost of local garlic P40 per kilo while imported garlic is pegged at P17 per kilo. That’s a far cry from over P350 a kilo in our markets now.

For now, we can only hope market forces will provide us relief from high prices. The reader who e-mailed me also observed that prices have now started to go down. The reader wrote that sale of garlic is now very poor. Retailers are afraid to buy more than what they can sell during the day. They expect the price to tumble.

Kiko Pangilinan told me that they are reviewing similar policies for rice that has caused similar problems lately. According to Kiko, they are convening on July 16 a 2 year strategic planning session for the NFA to precisely review import restriction policies.

Secretaries Purisima, Balisacan, Domingo, Governor Tetangco and the Presidents of Landbank and DBP will all be there, Sec Pangilinan said, so they can discuss and adopt key reform measures for the NFA. A Technical Working Group composed of reps of these agencies are now preparing the ground work for the workshop.

Sec Kiko said they will also be doing two-year strategic planning workshops for the NIA, the PCA and FPA at about the same time beginning July 12 to July 20 so that all the agencies under him responsible for food security are on the same page when it comes to targets and deliverables.

If P-Noy doesn’t see it yet, he will have to give agriculture policies a lot more attention in the next few months. Indeed, he must provide harassed housewives reeling from high food prices some relief in the next week or two.

Policymakers may be busy covering their asses on DAP and PDAF but unless something happens to arrest fast rising food prices, there will be increased dissatisfaction among our masa that will be difficult to ignore


Chief News Editor: Sol Jose Vanzi

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