Thursday, 11 March 2010

Deputy Presidential Spokesperson Gary Olivar today said growth in foreign direct investments (FDI), which is measured more in actual dollars, reached nearly the ideal eight percent a year enough to sustain development in the long term, since President Gloria Macapagal Arroyo assumed office nine years ago.

FDI last year also amounted to $1.9 billion, higher than the previous year’s $1.5 billion, indicating that investor confidence in the Philippines remained high despite the global economic downturn which started in September 2008.

Olivar stressed these positive Philippine economic indicators as he reacted to media reports that the country has been downgraded in a recent survey on corruption and how it relates to investors’ confidence.

The survey by the Political and Economic Risk Consultancy (PERC) ranked Indonesia as the most corrupt country in Asia by the same investors who downgraded the Philippines from sixth to fourth.

During a Malacañang press briefing today, Olivar said foreign investors make their calculations based on a whole set of objective and subjective factors, of which corruption is just one.

Olivar said, “very few (people) will expect Indonesia to lose investor interest as a result because of Indonesia’s vast natural resources, its favored status in the eyes of an Indonesian-bred US president and, yes, the reelection of a leader renowned for his anti-corruption commitment.”

“Indonesia will continue to be a hit among emerging markets,” Olivar stated.

“Compared to Indonesia, Philippine debt papers trade well as over 100 basis points premium, even better than what is justified by our respective sovereign debt ratings,” Olivar noted.

Both Indonesia and the Philippines carry the same BB-rating from Standard and Poor’s.

Although this may reflect to some extent that the Philippines is less corrupt, Olivar said “positive news about the Philippines’ infrastructure achievements, industrious and adaptable workforce, the stability of its politics and culture, and a national leader who is aggressively working to claim our rightful share in the world,” are also major factors.

He describes those who use the PERC survey to put off investors and put down the country as “charlatans who don’t know what they are talking about; cynics and opportunists and people who don’t care what they’re talking about.”

Earlier reports quoting Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said “the Philippines continued to attract foreign investments in 2009 as investors recognized the relative strength of the country’s underlying macroeconomic fundamentals, with inflation continuing to be low and falling within target, the external payments position remaining favorable, and economic growth showing resilience amid the strength in domestic demand.” (PND)