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Calpers backtracks on investing in the Philippines

Two months after declaring the Philippines a country unable to support institutional investment, Californian pension fund Calpers, one of the world's biggest investors, announced that it had made a mistake and that it did in fact consider the country a "recommended permissible market".

Its controversial decision to withdraw from the Philippines in February resulted from a review of the criteria of its permissible country list begun in August 1999. These aim to assess which emerging markets can support institutional investment. Following the review, Calpers' investment committee decided in principle to adopt recommendations to include measurements of political stability, transparency, and "productive labour practices" in its evaluation criteria.

Calpers denies that its decision to include these factors was ethically motivated, arguing that they contribute towards a market's ability to support investment, but its exact definition of the criteria led to widespread criticism from the southeast Asian media of moralistic posturing by the pension fund.

Calpers' definition of political stability mentions such factors as "progress towards the development of basic democratic institutions and principles", the "guaranteed elimination of human rights violations", the degree of civil liberties, the independence of the judiciary, and government stability - in that order.

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