Net inflows of job-generating foreign direct investments accelerated 57 percent in May to $572 million from $364 million a year ago, amid the positive outlook on the economy, the Bangko Sentral ng Pilipinas said 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,” the Bangko Sentral said in a statement.
Equity capital investments also yielded net inflows of $43 million, as equity capital placements of $83 million offset withdrawals of $40 million. Equity capital placements came mainly from Hong Kong, the United States, Japan, Singapore and Malaysia.
These funds 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 in May, or 7.8 percent higher than $65 million a year ago.
FDI inflows in the first five months, however, slowed 23.8 percent to $3 billion from $3.9 billion a year ago. This was due to the completion of the P37-billion investment in Security Bank by Bank of Tokyo-Mitsubishi UFJ Ltd. for a 20-percent stake in the local bank last year.
Net inflows in equity capital investments declined 85.4 percent in January to May to $213 million from a year earlier. The equity capital placements of $358 million came mostly from Japan, the US, Hong Kong, Singapore and Germany.
Bangko Sentral raised the FDI target this year to $8 billion from the previous estimate of $7 billion, on sustained investors’ confidence in the Philippine economy which continues to show strong macroeconomic fundamentals.
Bangko Sentral Deputy Governor Diwa Guinigundo said the bank also considered the actual net inflow of $7.9 billion in 2016 in readjusting the 2017 target.
The FDI net inflow of $7.9 billion last year surpassed the target of $6.7 billion, following the BTMU capital infusion in Security Bank. The 2016 figure was also 40.7 percent higher than the $5.72-billion net inflow in 2015.
The Bangko Sentral revisits the assumptions for foreign direct investments, hot money and other economic data twice every year.