Foreign investors still upbeat on RP

Despite the continued unpredictability of the currency exchange rate, foreign investors are becoming more and more optimistic about investment prospects in the country as the Arroyo administration struggles to contain the economic and political uncertainties.

Investors looking for havens in Asia are being lured by China but others said the Philippines was emerging as one of the more favorable locations despite the pessimism of most local investors.

Edward Gilbert, managing director of the $2.25-billion Lone Star Fund based in the US, said that foreign investors were encouraged first by the change in administration and its adherence to the effort to liberalize the economy as well as to address immediate security issues that have turned off most investors coming into Asia for the first time.

According to Gilbert, it was encouraging to see government policy pointed towards addressing long term concerns such as liberal investment policies, deregulation and reduction of trade barriers.

"The Arroyo administration also seems to be coping well with internal security operations, the steps it has taken are very impressive and I hope they will continue to make progress," Gilbert said.

Lone Star itself, Gilbert said, was taking definitive steps to make key investments in the country by way of acquiring problematic assets that it planned to turn around and sell for a profit, including real property assets.

"We normally hold on to these assets for four to five years while we turn them around and make them attractive to prospective buyers," Gilbert said. "By the time we do that, the whole economy would have improved substantially and we are optimistic of our prospects here."

Gilbert’s optimism, however, was tempered by reports that massive foreign capital has left the country between 1999 and 2000, equivalent to a total of $38 billion.