Mizuho Corporate Bank Ltd., one of Japan’s largest financial institutions, is looking at the Philippines for possible investment opportunities in the wake of the ongoing financial turmoil in the United States, Finance Undersecretary Gil Beltran said over the weekend.
Beltran, who met with top officials of Mizuho’s Manila branch and Mizuho’s Research Institute last week, said that the financial institution wants assurance that the Philippines remains an attractive investment site despite the crisis in the US.
Last week, US insurer American International Group (AIG) revealed that it was facing liquidity problems while investment bank Lehman Brothers also filed for bankruptcy. Its rival Merril Lynch & Co. agreed to be taken over by the Bank of America, also due to financial problems. These developments shook equities markets worldwide and has sent investors across the globe jittery.
Beltran met with Mizuho treasurer Taichi Kubota, senior head economist Hiroshi Yoshida and senior economist Suzuki Kazunori.
During the meeting, officials expressed concerns on the lower-than-expected economic slowdown for 2008. The government expects gross domestic product (GDP) growth to slow down to 5.5 percent to 6.4 percent for 2008 but Socioeconomic Planning Secretary Ralph Recto said GDP growth for the year could hit only 4.7 percent.
Mizuho officials also expressed concerns on rising inflation, with the official inflation estimates for 2008 revised upward to 9 to 11 percent from seven to nine percent previously due to higher food and oil prices.
The Japan-based financial giant also expressed concern on the weakening of the peso against the dollar as well as heavy reliance of the Philippines’ current account on dollar remittances from overseas Filipino workers.
It also expressed concern on the negative impact of a slowdown in the global economy on the inflow of dollar remittances into the country.
Beltran, for his part, assured Mizuho officials that the Philippine economy remains resilient despite uncertainties in the US.
The Finance executive said the government would be ready with contingency plans if the crisis in the US lingers.
The Bangko Sentral ng Pilipinas (BSP) also assured that the exposure of Philippine banks to the global financial crisis is minimal.