MANILA – Monetary officials have down-scaled their 2012 projections on foreign portfolio investments and foreign direct investments on account of negative developments on global economy.
The Bangko Sentral ng Pilipinas now projects a $4.5 billion net foreign portfolio investments for the Philippines, down from the $5.7 billion announced last December. Bulk of the inflows is expected to be placed in bond issuances of private companies.
Also, the foreign direct investments is now eyed to reach US$ 1.2 billion, down from the earlier projection of $2 billion as “investors will assume a wait-and-see stance” given the on-going developments in the global economy, BSP Deputy Governor Diwa Guinigundo said yesterday.
Guinigundo said that the FDI inflows were expected to benefit manufacturing, energy and services sectors, which are the same as last year's major beneficiaries, citing initial indications from the Bureau of Investments and the Philippine Economic Zone Authority.
The downward revisions of the FDI and the foreign portfolio investments, otherwise as hot money due to the speed it comes in and out of the economy, came a few days after BSP Governor Amando Tetangco Jr. announced the lowered targets for the balance of payments surplus and the gross international reserves for this year.
The BOP surplus for 2012 is now projected to reach $2.6 billion, down from $2.8 billion previously, and a foreign reserve is now eyed between a range of $77.5-78 billion from $79 billion earlier.
Both of which were revised on account of the impact of external volatilities.
As of last May, the country's GIR level stood at $76.02 billion, lower than month-ago's $76.54 billion but higher than year-ago's $68.85 billion.
The BOP surplus last April stood at $79 million, a turn-around from month-ago's $1.084 billion bringing the four-month surplus to $1.164 billion, which is lower than year-ago's $4.577 billion.
BOP is the sum of a country's economic transactions with the rest of the world.
Guinigundo said monetary officials expected higher imports for the country this year given the renewed demand for the Philippines' electronic products, particularly semiconductors.
Book-to-bill ratio for the country's imports was on the uptrend in the first quarter this year at 0.96 percent, 1.01 percent and 1.12 percent for January to March, respectively.
The April 2012 book-to-bill ratio slightly dipped to 1.10 percent but Guinigundo said the two percent decline was a “small reduction” and stressed that monetary officials expected the continued rise in the country's exports in the whole of 2012.
Book-to-bill ratio is a leading indicator for exports, particularly on semiconductor, as this is the proportion of received orders and shipped items for a specified period.*PNA