Loren appeals for more local, long-term investments

Senator Loren Legarda yesterday appealed to local businessmen to invest more to make up for the reported massive outflows of "hot' money from the country.

The chair of the Senate Committee on Agriculture, Loren said that any investment coming into the country is welcome, but added that what the country needs are long-term investments that will spur economic growth.

"Long term investments create more jobs, thereby improving the purchasing power of Filipinos, in which case more goods are procured thereby spurring increased production," she explained.

"I appeal to the sense of patriotism of our businessmen by investing more in times like this when dark clouds are hovering over the country's economic horizon," she said.

By doing so, the local investors would encourage foreign investors to invest more in the Philippines by showing that they have confidence in their own country.

Legarda issued the statement in reaction to reports that so-called hot money are flowing out of country due to tightening global liquidity that persist despite efforts of central banks to release more funds into the global financial system.

Latest data from the Bangko Sentral ng Pilipinas (BSP) show that the net ouflow of foreign portfolio investments registered with the central bank reached $399 million.

The outflow was bigger than the $389.8 million outflow registered in October.

"People behind hot money are by nature mere market players who get in and out of the investment market to realize profits or to cut their losses," Loren said.

'Hot money' refers to foreign investment collection in stocks, bonds and bank products that are all volatile in nature.

"Certainly, we need investors who bring in substantial investment capital and set up their industries here, providing a lot of jobs," she stressed.