By Hilarion M. Henares Jr.
HERE we present an analysis of the Outflow and Inflow of Funds during the period in question, in comparison with previous periods -- to show the effect of multinationals on the Balance of Payments of the Philippines.
We started with the individual firms. Of the 31 foreign companies under study, the following registered the biggest outflow of foreign exchange, most of which is in the form of inordinate amounts of cash dividends:
1) Dole Philippines, which sent out a net of P135.4 million, of which P128.5 million (95 percent) were profit remittance.
2) Colgate-Palmolive. which sent out a net of P72.9 million, of which P72.2 million (99 percent) were profit remittances.
3) Philippine Manufacturing Co. (PMC), which sent out a net of P58.2 million, of which P41.7 million (72 percent) were profit remittances.
4) Philippine Packing Corp. (Del Monte), which sent out a net of P58 million, of which P31.8 million were profit remittances and P26.1 million net settlement for foreign obligations.
5) Goodyear Tire & Rubber Co., which sent out a net of P55.7 million, of which P56.4 (101 percent) were profit remittances.
The biggest inflow of foreign exchange was registered by Caltex Philippines, which brought in P634 million., of which P662.2 million were net foreign loans, while P28 million were sent out as interest.
Without this single firm, the net receipt of P634 million loan, the overall net inflow of funds by the 31 corporations would have been wiped out. Instead of a net inflow of P75.5 million for the 31 companies, 30 of them (without Caltex) would have registered a net outflow of P558.72 million.
In short, without Caltex, 30 foreign companies during five years from 1971 to 1976, in the first part of the Martial Law period, sent out P560.49 million as profit remittances, payment of principal and interest on loans and of royalties, and brought in only P1.77 million as new investment and foreign loans or $316.66 sent out for every dollar brought in.
In the breakdown of the Outflow of Funds, we find:
1) In the overall statistics of 1972 to 1976 inclusive $1,631.88 million were sent out, of which $313.26 million (19.2 percent) were profit remittances, $1,186.66 million (72.7 percent) were for the amortization of loans, and $131.96 million (8.17 percent) were for withdrawal of investments.
2) For the 31 companies under study during the same period, P588.5 million were sent out, of which P304.94 million (51.8 percent) were profit remittances, P128.5 million (21.8 percent) were for payment of loans, and P155.09 million (26.4 percent) were for royalties and interests.
3) Without Caltex, the remaining 30 companies during the same period sent out P560.49 million. or which P304.94 million (54.4 percent) were profit remittances, P128.5 million (22.9 percent) were for payments of loans, and P127.06 million (22.7 percent) were for royalties and interests.
4) In the overall statistics of 1964-1971 inclusive, $3,017.58 million were sent out, of which $232.02 million (7.7 percent) were profit remittances, $2,692.39 million (89.2 percent) were amortizations of loans, and $93.17 million (3.1 percent) were withdrawals of investment.
5) The Bantegui study of 108 American companies from 1956 to 1965 shows that $386.2 million were sent out, of which $369 million (95.5 percent) were profit remittances, $10.2 million (2.6 percent) were net payments on loans and advances, and $7 million (1.8 percent) were royalty payments.
In the breakdown of the Inflow of Funds, we find:
1) In the overall statistics of 1972 to 1976 inclusive, $1,603.75 million were brought in, of which $485.10 million (30.25 percent) were investments and $1,118.65 million (69.75 percent) were foreign loans.
2) For the 31 companies under study during the same period, P663.98 million were brought in, of which P2.76 million (0.4 percent) were investments, and P661.22 million (99.6 percent) were foreign loans.
3) Without Caltex, the remaining 30 companies during the same period brought in P1.77 million, of which P2.76 million (156.8 percent) were investments, and a minus quantity of P1.00 million (-56.8 percent) may be considered payment of loan.
4) In the overall statistics of 1964-1971 inclusive, $549.32 million were brought in, of which $113.54 million (20.67 percent) were investments and $435.78 million (79.33 percent) were foreign loans.
5) The Bantegui study of 108 American companies from 1956 to 1968 shows that only $58.6 million were brought in, of which $39.4 million (67.24 percent) were investments and $19.2 million (32.76 percent) were foreign loans.
Henares, Hilarion Jr. Beggar and King – Make My Day Book 19.
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