A spreading wave of violence against prominent business figures has frightened some investors and worried Philippine leaders fear that the country's embryonic economic recovery may die aborning.

In late January, an executive of Nestle Philippines Inc. was killed by gunmen in an attack on his home in Cavite, just across the bay from the capital, Manila.A neighbor who tried to help Terencio Faustino, vice president of the local unit of Swiss-based Nestle SA, was also killed. Mr. Faustino's 5-year-old adopted son was wounded.

Earlier in January, a senior U.S. official at the Asian Development Bank was clubbed and stabbed to death in the bank's basement parking lot.

An American executive was kidnapped in broad daylight Jan. 17, steps away

from his office in Manila's financial district. Despite extensive U.S. and Philippine efforts, Michael Barnes, 41-year-old vice president and general manager of Philippine Geothermal Inc., is still being held.

Such incidents have thrust the increasing danger of Manila's streets squarely into the public eye. They are also raising fears that the negative publicity could scare away foreign investors desperately being wooed to aid recovery.

Philippine President Corazon Aquino has initiated several economic reforms designed to make the country more attractive to foreign companies. Now, she is publicly demanding her security forces stamp out the kidnappings.

With each attack, expatriate executives here say they are becoming more wary. Some are beginning to take a closer look at the Philippines' regional competitors as relocation sites.

The attacks could "contribute to massive capital flight and has already contaminated the investment climate," said Neptali Gonzales, Senate president.

Frank Wisner, U.S. ambassador, warned that "moves to open the economy of the Philippines are undermined when the very safety of the investor is called into question."

The daylight abduction of Mr. Barnes, whose company is a unit of Unocal Corp. of Los Angeles, set the business community particularly on edge. It spotlights what lawmakers and the business sector call a kidnapping industry.

"In 1991 alone there were more than 50 kidnappings with an estimated payoff of 200 million pesos (about $7.6 million)," said Sen. Ernesto Maceda in a recent speech. "Metro Manila used to be described as the dirtiest city in Asia. Now it has also been named the most dangerous."

Police blame the kidnappings on communist rebels; the guerrillas deny it. Many people believe the authorities are groping for a political scapegoat to a growing criminal problem.

The kidnapping industry previously concentrated on wealthy Filipino-Chinese executives. Their families prefer to keep quiet and pay the ransom.

Three ethnic Chinese businessmen were kidnapped, one near the presidential palace, within a week after the Barnes abduction.

"What is alarming is the public's perception or acceptance of the fact that either military or police personnel or both are involved in the kidnapping syndicates," Mr. Maceda said.

Analysts said the syndicates are growing bolder. They are demanding larger ransoms, reaching up to 50 million pesos, and also kidnapping Japanese and other Asian nationals.

"Most of the businessmen have been aware of the problem," said Alex Magno, an academic and political commentator. "The only distinction with the Barnes kidnapping was that it was an American this time and not an Asian," he told The Journal of Commerce.

Although authorities have yet to solve the Barnes case - or even contact the kidnappers - there are signs of progress in a larger sense.

Less than 24 hours after Mr. Barnes was kidnapped, investigators cracked down on a 15-member kidnapping gang notorious for abducting Chinese-Filipino businessmen.

A 150-man police detachment was fired last Thursday after complaints about the failure to halt kidnappings and robberies of Chinese families.

"This case will probably force authorities to really do something about the problem because of the international attention it is getting," Mr. Magno said.