Net FDI Investment in the Philippines Inflows surge 142% in Q1 - BSP

The Banco Central Sa Pilipinas / Bangko Sentral ng Pilipinas (BSP) reported  June 9, 2011 that net foreign direct investment (FDI) inflows surged 142 percent in March as equity infusion more than doubled while withdrawals declined.

BSP Governor Amando Tetangco Jr. said that net FDI inflows amounted to $167 million Dollar in March or $98 million lower than the $69 million inflows booked in the same month last year.

"All FDI components yielded positive balances during the month," Tetangco stressed.

Data showed that equity placements jumped 113 percent to $64 million Dollar in March from $30 million in the same month last year while withdrawals slowed down by 47 percent to $18 million from $34 million.

The net inflow of other capital account consisting largely of intercompany borrowing between foreign direct investors and their subsidiaries or affiliates in the Philippines jumped 146.2 percent to $96 million in March from $39 million in the same period last year while reinvested earnings fell 26.5 percent to $25 million from $34 million.

In all, Tetangco said net FDI inflows retreated by 16.6 percent to $471 million in the first quarter of the year from $565 million in the same period last year due to the tensions in Middle East and North African (MENA) states, the debt crisis in Europe, and the disasters in Japan.

"Investors remained cautious on account of the uncertainties brought about by the ongoing sovereign debt problems in Europe, the political unrest in the MENA region as well as the disasters that struck Japan," the BSP chief stressed.

Equity placements retreated by 7.6 percent to $121 million from January to March compared to $131 million in the same period last year while withdrawals plunged 53.5 percent to $40 million from $86 million.

Data showed that reinvested earnings plummeted 38.3 percent to $113 million from $183 million while other capital fell 17.8 percent to $277 million from $337 million.

FDI inflows retreated by 12.7 percent to $1.71 billion last year from $1.96 billion in 2009 as equity placements plunged 42.5 percent to $1.15 billion while equity withdrawals increased by 10.8 percent to $307 million.

The drop was attributed to the decline in equity capital investments in new and existing projects as investor sentiment was generally marked by cautiousness and uncertainties surrounding the sovereign debt crisis in some parts of Europe, geopolitical tensions in Korea, asset price bubble and overheating concerns in fast growing emerging markets.

Likewise, the BSP explained that large-scale investments arising from the privatization of a local power corporation and the acquisition of shares of a local beverage manufacturing firm were recorded in 2009.

These included the investment made by China's largest electricity provider State Grid Corp. and Monte Oro Grid Resources Corp. in state-owned National Transmission Corp. (Transco) that bagged a $3.95 billion concession contract as well as the decision of Japanese brewer Kirin Holdings to acquire a stake in Manila-based San Miguel Brewery of diversified conglomerate San Miguel Corp. worth ₱ 65.8 billion.

Monetary authorities are confident that FDIs would continue to pour into the Philippines to fund projects under the Aquino administration's public private partnership (PPP) scheme.

 

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Vietnam will conduct a live Fire Drill in the Paracels - June 13

China’s Claims with undisputable over Spratlys is true as it is baseless according to the UNCLOS

After the Philippines’ protests to the United Nations for China’s navy harassing Philippine Oil Research Ship in the Philippine Waters - UNLOS International Law of Seas 200 Nautical Exclusive Economic Zone of the Philippines, China pronounced their undisputable claim over Spratlys as it is 1000 Nautical Mile from their shore. China’s invasion is a purely invasion to the waters of the Philippines and Vietnam as they are not part to be called as having a reliable claim over the area.

The same word by “hong” (China’s Spokesperson)  to Vietnam as Vietnam and the Philippines have almost the same rights over Spratlys as part of Spratlys is Within Philippine Sea and other parts are within the Vietnam Waters.

For the common understanding to the International community it is  the right time for China to back off as they are not part of the Spratlys in the West Philippine Sea. The same thing with Vietnam to follow the UNCLOS and must not extend their claims to the Philippine waters so the peace will be re-established in the disputed sea.

Hong reiterated last June 7, 2011 that China has indisputable sovereignty over the South China Sea islands and their adjacent waters. His claim is very true because UNCLOS International Law of the Sea defined 200 Nautical Mile and China’s distance to the Spratlys is 1,000 Miles(One Thousand Miles).

What’s china did is just to bully the neighbors  and to annoy them as they have no rights and sovereignty over West Philippine Sea – The Spratlys.

Vietnam’ s Live Fire Drill in Paracel - June 13, 2011

A fall out over territory in the South China Sea escalated Friday when Vietnam announced a live ammunition drill in an apparent response to China's demand that the Vietnamese halt all oil exploration in the area.

The verbal clash between the two communist neighbors follows a similar one between China and the Philippines earlier in the week over another area of the South China Sea & West Philippines Sea, where several countries are eyeing potentially rich oil and gas reserves.

The disputes generally pit China against its neighbors and have pulled in the United States, which has said it considers some of China's sea claims to be an infringement of international waters and a possible damper on international trade.

Vietnam said it would carry out two exercises totaling nine hours Monday in an area off the country's central Quang Nam province in the East Sea of Vietnam adjacent to the Paracel . The announcement on the website of the state-owned Northern Maritime Safety Corp. warned boats and ships to stay out of the area. It was the first time Vietnam has issued such an alert about conducting live-fire maritime drills.

It came a day after China and Vietnam traded diplomatic punches, with each demanding that the other stay out of waters they claim.

China had accused Vietnam of endangering its fishermen's lives. Earlier Thursday, Vietnam slammed China for interfering with its seismic survey off the central Vietnamese coast, saying the Chinese fishing boat supported by two patrol boats had damaged an exploration cable of the Petro Vietnam a state-owned Vietnamese research boat.

Vietnam said it was the second time China had hindered the operation of an oil and gas exploration boat in two weeks, adding that its actions were "completely premeditated" and accusing it of flaring regional tensions in the South China Sea.

Hanoi says both incidents occurred well within the 200 nautical miles guaranteed to Vietnam as an exclusive economic zone by international law UNCLOS.

Chinese foreign ministry spokesman Hong Lei said the Chinese fishing boat crew had instead been in waters around the Spratly Islands of the West Philippine Sea in the Philippine Waters, which are claimed by China and Vietnam and some other Asian nations. He said the crew had merely been protecting itself after being dragged backward for over an hour by a Vietnamese oil and gas exploration vessel - one, he said, that was "illegally working at the scene."

"The claims made by Vietnam are complete misrepresentations of the truth. As is known to all, China has indisputable sovereignty rights over the Spratly Islands and the waters nearby," Hong said.

"It needs to be pointed out that in illegally exploring for oil and gas and forcing out Chinese fishing boats from the Wan'an bank of the Spratly Islands in the West Philippine Sea, Vietnam has seriously violated China's sovereignty and maritime rights," he said.

"China demands that Vietnam stop all invasive activities," Hong said.

Last weekend, thousands of Vietnamese marched in Hanoi and Ho Chi Minh City in rare demonstrations demanding that China stop invading Vietnam's territory.

On Thursday, China denied an allegation by Filipino officials that Chinese forces had intruded into Philippines-claimed areas in the West Philippine Sea around the Spratly Islands six times since February and of firing shots at least once to Filipino Fishermen. Beijing said it would use violence only when attacked but the armless Filipino Fishermen were attacked by the China’s navy opposite from the liar Beijing.

Although the tension is unlikely to escalate beyond a war of words, the conflict could draw in the United States, which worries that the disputes could hurt access to one of the world's busiest sea lanes.

U.S. Secretary of State Hillary Rodham Clinton said last year that the peaceful resolution of disputes over the Spratly and Paracel island chains was in the American national interest.

One of the Legal ground of Secretary Clinton is the American – and the Philippines signed agreement to protect the Philippines from any invaders and the Spratlys is within the Philippine Waters in the West Philippines Sea 200 Nautical Mile Exclusive Economic Zone of the country which is America is obliged to act on every invasion. 

 

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Bank loans in the Philippines up 14.2% to P 2.42 Trilion as of April 2011

Economy: The Bangko Sentral ng Pilipinas (BSP) reported yesterday that bank lending continued to post double-digit growth in April despite the economic slowdown experienced in the first quarter of the year.

BSP Governor Amando M. Tetangco Jr. said in a statement that bank loans grew 14.2 percent to P2.423 trillion as of end-April from P2.121 trillion as of end-April last year.

“The steady growth in bank lending reflects the prevailing pace of domestic economic activity,” Tetangco stressed.

This was the fourth straight month that bank lending posted a double digit growth after expanding by 11 percent in January, 12.3 percent in February, 14.1 percent in March, and 14.2 percent in April.

Economic managers through the Cabinet level Development Budget Coordination Committee (DBCC) see the country’s domestic output as measured by the gross domestic product (GDP) growing between seven percent and eight percent this year and next year.

The country’s GDP posted a surprising growth of 7.6 percent last year after slackening to 1.1 percent in 2009 from 3.8 percent in 2008 due to the full impact of the global financial crisis.

As expected, the country’s GDP growth slowed down to 4.9 percent in the first quarter of the year from the revised 8.4 percent in the same quarter last year due to government underspending as well as the weak global trade.

Despite the economic slowdown, loans extended to productive activities grew 15.7 percent to P2.187 trillion as of end-April from P1.899 trillion in the same period last year as corporate borrowers sourced more loans from banks to bankroll their expansion programs.

In terms of growth, data showed that loans to the mining and quarrying sector posted the biggest growth of 74.2 percent followed by the electricity, gas, and water with 47.3 percent, and the manufacturing sector with 19.5 percent.

In terms of amount, the manufacturing sector got the biggest share with P406.18 billion followed by the real estate, lending and business services with P385.9 billion; the agriculture, hunting, and fisheries sector with P344.38 billion; wholesale and retail trade sector with P269.1 billion; and the electricity, gas, and water sector with P215.3 billion.

Tetangco also reported that the growth in the loans extended for household consumption was steady at 12.9 percent to P199.41 billion in end-April from P176.59 billion in the same month last year.

Data showed that credit card loans went up by 7.6 percent to P120.5 billion from P111.95 billion while auto loans jumped 27.3 percent to P62.2 billion from P48.86 billion.

The BSP chief pointed out that authorities would ensure appropriate monetary and financial conditions for continued credit expansion while promoting the BSP’s primary mandate of maintaining price stability.

“Going forward, the BSP will contiue to provide the appropriate credit conditions to support its primary mandates of maintaining monetarya and financial stability ,” Tetangco added.

A BSP survey showed companies are still planning to expand their operations and hire more workers in the Philippines this year despite the projected easing in economic growth this year.

BSP director for Department of Economic Statistics Rosabel Guerrero said one of every four respondents of the Business Expectations Survey (BES) for the second quarter 2011 indicated plans to expand their operations.

“About one for every four respondents in the industry sector ir 24.7 percent indicated expansion plans for the third quarter,” Guerrero stressed.

However, she explained that the percentage of respondents that signified their intention to expand their operations went down to 24.7 percent in the second quarter of the year from 33.9 percent in the first quarter.

In terms of Employment Outlook Index of the survey, Guerrero said the number of respondents who expected to continue hiring in the third quarter declined to 14.5 percent in the second quarter from 23 percent in the first quarter

 

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