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Foreign portfolio investment in Philippines falls sharply |
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August 5, 2000
MANILA (AP) - Foreign portfolio investment in the Philippines fell sharply in the first six months of this year according to central bank data released Friday that reflects the heavy losses on Manila's financial markets. Net foreign portfolio investment in the Philippines was dlrs 20 million in June, down from dlrs 30.8 million in the year-earlier month. Inflows totaled dlrs 287.2 million while outflows were dlrs 267.2 million. Portfolio investments include holdings in the stock market, peso-dollar market, mutual funds and other investments available to foreigners. The flow of investments to and from the Philippines has dropped sharply since the start of this year, as reflected in the poor performance of Philippine stocks and the peso. The Philippine Stock Exchange's main index has lost 32 percent over the past seven months, closing at 1,451.18 Friday from 2,141.77 on Jan. 3. The peso, meanwhile, has depreciated 10 percent against the dollar, averaging 44.627 pesos in late afternoon trading Friday compared with 40.021 pesos on Jan. 3. In June 1999, investment inflows totaled dlrs 1.12 billion while outflows were dlrs 1.09 billion, resulting in a net foreign portfolio investment of dlrs 30.8 million. HSBC Manila treasurer John McGowan said foreign investors have been pulling out of the Philippines because of a lack of incentives to remain. Allegations of cronyism and corruption in the administration of President Joseph Estrada have spooked investors since late last year. Sentiment toward the Philippines further deteriorated with the escalation this year of fighting between military troops and Muslim rebel groups in southern Mindanao. |