Philippine Exports, FDIs and "Hot Money"

Exports
The 2006 Philippine export growth of 14% to $47.03 billion outperformed the government's growth target of 10%
This is despite the decline in exports by in December (the first drop in 13 months), as the strong peso made the country's exports more expensive for foreign buyers. In December, exports fell 3.8% year-on-year to $3.68 billion after a 10.7% gain in November.


Foreign Direct Investment (FDI)
Investor enthusiasm over the country's improving economy has started to translate into significant grwth in Foreign Direct Investment. For the first 11 months of 2006, FDIs reached $ 2 billion with November inflows reaching $ 46 million. This is the highest since 2001.
Investor confidence was boosted by the solid macroeconomic fundamentals particularly the improvement in the government's fiscal position and the steady decline in inflation rate.


"Hot Money"
Foreign investments in Philippine stocks, bonds and other financial instrumens stood at $252.52 million in January, more than reversing an outflow of $115.47 million a year earlier.

Net inflows for the whole of 2006 went up by 24% and reached $2.602 billion, about $498.4 million more than the total inflow in 2005 which was at $2.103 billion.

According to BSP Governor Amando Tetangco, the development reflected continuing bullish sentiment on the country's economic prospects following evidence of sustained improvement in economic and financial indicators.
He cited the continued slowdown in inflation to 4.3% in December, a better-than-expected balance of payments surplus of $3.77 billion in 2006 and the reduction in the fiscal deficit to $62.2 billion in 2006.


reference / source: The Philippine Star; Business Pages February 10, 2007 - Saturday