Foreign direct investment net inflows grow 57% in May

August 10, 2017

Foreign direct investments (FDI) recorded net inflows of $572 million in May 2017, higher by 57 percent than the $364 million registered in the comparable period last year.

This was driven by continued positive outlook on the Philippine economy buoyed by strong macroeconomic fundamentals, the central bank said in a statement on Thursday.

All FDI components yielded net inflows during the period.

In particular, debt instruments (or lending by parent companies abroad to their local affiliates to fund existing operations and business expansion) posted net inflows of $459 million, an increase of 108.3 percent from the $220 million recorded in May 2016.

Equity capital investments likewise registered net inflows of $43 million as equity capital placements of $83 million more than offset withdrawals of $40 million.

Equity capital placements during the month were sourced mainly from Hong Kong, the United States, Japan, Singapore, and Malaysia. These capital infusions were invested largely in real estate; financial and insurance; manufacturing; electricity, gas, steam and air conditioning supply; and wholesale and retail trade activities. Reinvestment of earnings amounted to $71 million, 7.8 percent higher than the $65 million recorded in May 2016.

As a result of these developments, FDI net inflows for the first five months of the year reached $3 billion, albeit lower by 23.8 percent than the $3.9 billion posted for the same period last year.

Net inflows in equity capital investments declined by 85.4 percent to $213 million during the period. Equity capital placements aggregating $358 million came mostly from Japan, the United States, Hong Kong, Singapore, and Germany. These were channeled mainly to real estate; financial and insurance; manufacturing; wholesale and retail trade; and electricity, gas, steam and air conditioning supply activities.

Net investments in debt instruments increased by 12.8 percent, amounting to $2.4 billion from the $2.2 billion registered in the same period last year. Meanwhile, reinvestment of earnings grew by 7.5 percent to $345 million during the period. DMS