Credit Contraction

The US Economic Downturn causes a net Outflow of Foreign Cash In The Philippines

The Inquirer.net is reporting that according to the Philippine Central Bank there has been a large outflow of foreign investment for the year. This is mostly from foreign investors converting their Peso into their native currency.

For the January-September period, foreign portfolio investments registered a net outflow of $487.52 million, in sharp contrast to a net inflow of $3.4 billion in the same period last year.

There are many causes for this but large investors need dollars. Banks in the US refusing to make loans with the impending recession slows the creation of dollars. It would appear that other currencies are in demand as well.

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