Foreign capital struggles for relevance in the Philippines

When engaging in conversation with members of Manila’s finance community, it doesn’t take long for the topic of the country’s vast capital reserves to arise.

“The central bank has over Ps1.7 trillion $40 billion in special deposit accounts held by local financial institutions, and another Ps200 billion in repos,” explains Eduardo Francisco, president of BDO Capital, and a promoter of the country’s financial self-sufficiency. “These deposits roll over every 90 days, so there is no shortage of peso liquidity in the market.”

There is also a healthy store of US dollars, with banks reportedly sitting on $25 billion in reserves generated from overseas worker remittances and income...