MANILA, Philippines – A surge in foreign investments would drive long-term growth, but it may also hurt the economy, according to British bank Barclays.
In a report entitled “Double-edged Foreign Inflows,” Barclays said higher levels of foreign investments may “create additional appreciation pressure” on the peso, which, if not closely watched, may affect the country’s economic growth.
“Foreign investment is likely to flow into countries with high historical returns on capital. Balance of payments data can help identify countries with particularly high returns on foreign investments in bonds and equities, and on foreign direct investment. We find returns on foreign investments have been high in Malaysia, the Philippines, Thailand and Indonesia, which bodes well for future inflows,” the report read.
“These (foreign investment) flows are perhaps unwanted as they create additional appreciation pressure… Currencies in Malaysia, the Philippines and China with high (past) returns for foreign investors and current account surpluses are likely to experience appreciation pressures.”
In an earlier interview with Rappler, Socioeconomic Planning Secretary Arsenio Balisacan said a strong peso is “threatening to erode our competitiveness.” A strong peso is said to pose a “serious threat” to OFW remittances and the outsourcing and export sectors.
To help counter the bad effects of currency appreciation, the British bank urged the Bangko Sentral ng Pilipinas to increase returns on foreign assets through the diversification of foreign reserves.
“We think the Philippines, India, Indonesia and Thailand may increase exposure to higher-yielding or strong-growth emerging markets in order to increase their historically low returns on foreign assets,” the report read.
“Given a relatively low external financing need, countries such as the Philippines, Malaysia, China and Thailand could benefit from diversification of their foreign reserves and boost the returns on their foreign assets.”
The country’s foreign direct investment inflows stood at P2.033 billion in 2012, up 10% from P1.852 billion in 2011. –CHRISTIAN BAUTISTA, Rappler.com
June 2025
Philippine Environment Month!
“Action for Nature, for the Future!”
Invoke Article 33 of the ILO Constitution
against the military junta in Myanmar
to carry out the 2021 ILO Commission of Inquiry recommendations
against serious violations of
Forced Labour and Freedom of Association protocols.
Accept National Unity Government (NUG)
of Myanmar. Reject Military!
#WearMask #WashHands #Distancing #TakePicturesVideosturesVideos
Monthly Observances:
1 Jun – World Day of Parents
5 Jun – World Environment Day
7 Jun – World Food Safety Day
8 Jun – World Oceans Day
12 Jun – World Day Against
Child Labour
15 Jun – World Elder Abuse Awareness Day
16 Jun – International Day of Family Remittances
17 Jun – World Day to Combat Desertification and Drought
20 Jun – World Refugee Day
25 Jun – Day of the Seafarer
27 Jun – Micro-, Small and Medium-sized Enterprises Day
Daily Observances:
First Saturday of July:
International Cooperative Day
in the Philippines
