Investment rises in RP

Investment rises in RP

MANILA (AFP): Foreign portfolio money is returning to the Philippines after the global aftershocks of the Mexican currency crisis, the Central Bank said yesterday.

Central Bank Governor Gabriel Singson said investment managers plowed a net US$125 million through six major banks in the four weeks to May 26, compared with a net outflow of $27 million in the first five weeks of 1995 and $45 million in March.

The increased volume is exerting an upward pressure on the peso, forcing the Central Bank to step up its purchases of dollars, ending the month of May with a net purchase of $385 million, Singson said in a statement.

He attributed the situation to the "fresh mandate given to President (Fidel) Ramos and his coalition party" in the May 8 elections.

He said foreign portfolio investments would continue to stream in this month following a credit upgrade of the Philippines by rating agency Standard and Poor's.

The additional liquidity in the financial system should "buoy up the stock market which can, in turn, encourage more inflows," Singson said.