February registered a net inflow

According to the Institute for Development and Econometric Analysis, Inc. (IDEA), foreign portfolio net inflows (FPNI) reached US$534 million in February—approximately four times the US$139 million net inflows a year ago. About 89.6 percent of the FPNI were from Singapore, United States, United Kingdom, Luxembourg, and Hong Kong. Surge in investments in peso?denominated government papers amounting to US$730 million contributed to the year?on?year growth.

Likewise, per same published report, amid strong demand and sound market fundamentals, the Philippine Stock Exchange (PSE) is expecting a vigorous performance in the market this year given planned initial public offerings, the resumption of listings by introduction, and follow?on offerings. According to PSE President and CEO Hans B. Sicat, in the absence of any major disturbances in the global economy, the market will come through the disaster in Japan and the ongoing consolidation in share prices.

Furthermore, higher spending and imports have led the government to expect Php1.411 trillion in revenues this year, which could help finance 82.5 percent of targeted expenditure of Php1.711 trillion. This will result in a Php300 billion deficit, which remain equal to the cap of 3.2 percent of gross domestic product.

However, on the down side, it was also reported that the unemployment rate in January swelled to 7.4 percent, 0.1 and 0.3 percentage point higher than last quarter and last year, respectively. Analysts warned that unemployment rate would be higher in the next quarter as workers in the Middle East are repatriated to the Philippines due to political tensions in the area, as well as new graduates look for work. Also, transport partylist 1?United Transport Koalisyon urged the government to push for a Php12 minimum jeepney fare should the latter fail to avert the rise in fuel prices. On top of this, the exports sector may be adversely affected by the disaster in Japan as the local electronics industry, which contributes a big chunk of the country's exports, could face disruption of supply chain, making it hard to look for raw materials needed to produce electronics products.

Overall however, the Standard and Poor’s (S&P) expected the Philippines to maintain a solid but slower growth this year, like most countries in the Asia?Pacific region. The S&P forecasted the Philippine economy to expand 5.1?5.6 percent this year, which is lower than both the government’s target of 7?8 percent and the previous year’s actual 7.3?percent growth. The main reasons seen for this slowdown are slower exports pickup, the end of fiscal and election spending, and a high base, according to IDEA.

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