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Net inflows of foreign direct investments jumped 95% to $4.2b in first half

Net inflows of foreign direct investments jumped 95 percent in the first half to $4.2 billion from $2.2 billion a year ago, on investors’ sustained confidence in the Philippine economy, Bangko Sentral ng Pilipinas said Tuesday.

“In particular, investments of parent companies abroad in debt instruments issued by local affiliates or inter-company borrowings contributed a large part to the increase in FDI as these transactions more than doubled to $2.4 billion from $1.1 billion,” Bangko Sentral said.

Net equity capital grew 112 percent on account of the combined effects of higher gross equity capital placements and lower capital withdrawals.

Equity capital placements in January to June increased to $1.6 billion from $884 million in the same period last year, while equity capital withdrawals fell to $166 million from $203 million.

Equity capital placements came mainly from Japan, Singapore, Hong Kong, the United States and Taiwan. 

These were infused largely in financial and insurance, real estate, manufacturing, construction, and accommodation and food service activities. Meanwhile, reinvestment of earnings declined 0.7 percent.

Data showed that in June alone, FDI net inflows reached $238 million, although this was 40.9 percent lower than $404 million a year ago. 

Equity capital placements amounted to $36 million in June, while equity capital withdrawals reached $41 million, resulting in net outflows of $5 million, compared to net inflows of $215 million in the same month last year.

Equity capital investments in June came largely from Japan, the US, Singapore, Hong Kong and China. These were channeled to real estate, electricity, gas, steam and air-conditioning supply, information and communication, wholesale and retail trade and manufacturing activities.

Investments in debt instruments rose 49.4 percent to $182 million from $122 million a year ago. Reinvestment of earnings decreased 7.8 percent to $62 million in June.

Monthly FDI inflows hit a record $2.2 billion in April, from $382 million a year ago on the back of the country’s favorable investment climate.

Bangko Sentral’s department of economic statistics said the April data was a record high on a monthly basis from the time it adopted the Balance of Payments Manual, 5th Edition.

Bangko Sentral said investors remained optimistic in the Philippines, “as the economy continued to post strong growth and show even better growth potentials.”

FDI net inflows hit $5.72 billion in 2015.  This year, Bangko Sentral expects net FDI inflows to rise to $6.3 billion.

Bangko Sentral said earlier the implementation of various private-public partnership projects, particularly infrastructure deals, would give a strong signal to investors, boosting their confidence in the country.

Bangko Sentral’s statistics on foreign direct investments cover actual investment inflows, which could be in the form of equity capital, reinvestment or earnings and borrowings between affiliates.

Topics: Net inflows of foreign direct investments , Philippine economy , Bangko Sentral ng Pilipinas

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