FDI net inflows up 70% in August: central bank

November 10, 2017

Foreign direct investments (FDI) net inflows increased by 70 percent to $1.2 billion in August from $708 million a year ago, the Bangko Sentral ng Pilipinas said Friday.

This reflected continued favorable investor sentiment on the Philippine economy on the back of the country’s strong macroeconomic fundamentals, the central bank's statement said.

All FDI components posted net inflows during the period.  In particular, net equity capital investments surged to $611 million from $8 million a year ago.

The bulk of equity capital placements during the month originated from the United States, Singapore, the Netherlands, Hong Kong and Japan.

These were channeled mainly to manufacturing; real estate; wholesale and retail trade; transportation and storage; and electricity, gas, steam and air conditioning supply activities.  Investments in debt instruments (or intercompany borrowings between foreign direct investors and their subsidiaries or affiliates in the Philippines) amounted to $533 million, albeit lower by 15.7 percent than last year’s level.  Meanwhile, reinvestment of earnings was pegged at $59 million during the month.

On a cumulative basis from January to August , FDI net inflows reached $5.1 billion, lower by 5.2 percent than the $5.4 billion recorded in the same period last year.

The main reason for the decline in FDI was the lower equity capital placements and higher withdrawals during the period, decreasing net equity capital investments by 40.3 percent to $883 million from $1.5 billion.  Equity capital infusions during the period came mostly from the US, Singapore, Japan, the Netherlands, and Hong Kong.

These were invested mainly in manufacturing; real estate; wholesale and retail trade; financial and insurance; and electricity, gas, steam and air conditioning supply activities.  In contrast, investments in debt instruments amounted to $3.7 billion, an expansion of 8.4 percent from $3.4 billion last year.

In addition, reinvestment of earnings grew by 6.4 percent to $546 million during the period. DMS