FDI net inflows reach $543m in July; January-July level at $4.1b

October 10, 2019

Foreign direct investment (FDI) net inflows reached $543 million in July 2019, bringing the year-to-date FDI to $4.1 billion, the Bangko Sentral ng Pilipinas ( BSP) said Thursday.

Non-residents’ net investments in debt instruments (composed mainly of intercompany borrowings between affiliates) posted $357 million while non-residents’ net investments in equity capital amounted to $99 million during the period.

On the latter, the level was lower compared to that posted a year ago due to the decrease in equity capital placements by 39.6 percent, to $168 million (from $278 million) and expansion of equity capital withdrawals by 302.4 percent, to $69 million (from $17 million). 

Equity capital infusions during the month came mostly from Japan, Germany, Singapore, the United States, and South Korea.

These placements were directed largely to 1) financial and insurance, 2) real estate, 3) manufacturing, and  4) human health and social work industries. 

Reinvestment of earnings increased by 15.8 percent to US$87 million during the month from $75 million a year ago.

From January to July,  FDI net inflows aggregated $4.1 billion, 39.1 percent lower than the $6.8 billion posted a year ago.

This stemmed from the decline in non-residents’ net investments in equity capital by 75.1 percent to $459 million (from $1.8 billion) and in debt instruments by 30.3 percent to $3.1 billion (from $4.4 billion), reflecting the impact of the weak pace of global economic activity that took toll on investors’ business confidence and investment decisions globally.

Placements of equity capital contracted by 49.2 percent to $1 billion (from $2 billion), and equity capital withdrawals increased by 215.8 percent to $569 million (from $180 million). 

Equity capital placements during the period emanated largely from Japan, the United States, Singapore, China, and South Korea.

These were channeled mainly to 1) financial and insurance, 2) real estate, 3) manufacturing, 4) transportation and storage, and 5) administrative and support service industries.

Meanwhile, reinvestment of earnings expanded by 12.6 percent to $595 million from $528 million in the same period last year. DMS