^

Business

Soaring inflation, weakening peso worrying investors

Zinnia Dela Peña - The Philippine Star
Soaring inflation, weakening peso worrying investors
MPIC president Jose Ma Lim said foreign investors have raised concerns about the spiraling costs of goods and services, weakening currencies and the government’s ability to fulfill its promises.
File Photo

MILAN  – Soaring inflation and a volatile exchange rate in the Philippines are starting to rattle foreign investors, a top official of infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) said.

MPIC president Jose Ma Lim said foreign investors have raised concerns about the spiraling costs of goods and services, weakening currencies and the government’s ability to fulfill its promises.

Prices of basic goods increased at their fastest pace in nine years to 6.4 percent in August, signaling another interest rate hike may be in the offing.

Inflation is a major concern for investors because it could further drive borrowing rates higher and weaken corporate profits, stock prices and the local economy.

Also, the sharp movements in the peso-dollar exchange rate can slow down economies by accelerating inflation and increasing the weight of external debt.

Lim, who recently met with investors from London, said fund managers are also getting jittery over political issues.

“There’s so much political noise. There are many things to worry about – the government’s ability to do what it says it wants to do, volatile exchange rates, and the federalism issue. These concerns will definitely put more pressure,” he said in this Italian city.

“Foreign investors want to first see if the government is managing its financial affairs prudently before they invest. Otherwise, they will stay away from the market,” Lim said.

Foreign fund withdrawals have already reached over $1.14 billion so far this year and could go up to $2 billion by year-end.

Lim said the government needs to improve its capability to deliver on its promises.

“Foreign investors want that commitment to translate into tangible performance. That’s the only thing that will count,” he said.

Lim said foreign investors also want to see if the government would make good on its Build Build Build promise.

“We need to work hard with the government to accelerate rights-of-way delivery so we can get construction started and funds deployed on our projects,” he said.

The Duterte government earlier said it was embarking on an ambitious $180 billion infrastructure program to upgrade the country’s dilapidated roads, railways, ports and airports, which have been a drag on the economy.

Infrastructure has been a major source of concern for foreign investors.

MPIC itself continues to face various regulatory roadblocks with respect to its long-pending tariff issues.

The local flagship of First Pacific Group of Hong Kong, MPIC is engaged in provision of water and sewerage services, bulk water supply, toll operations, power distribution, healthcare and railways.

vuukle comment

INFLATION

Philstar
x
  • Latest
  • Trending
Latest
Latest
abtest
Recommended
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

Get Updated:

Signup for the News Round now

FORGOT PASSWORD?
SIGN IN
or sign in with