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FDIs jumped 20% to $8.7b in 11 months

Net inflows of foreign direct investments reached a record $8.7 billion in the first 11 months of 2017, up 20.1 percent from $7.26 billion a year ago, data from the Bangko Sentral ng Pilipinas show.

The 11-month FDI figure also surpassed the whole-year target of $8 billion.

“The sustained FDI inflows reflected investor confidence given the Philippine economy’s solid macroeconomic fundamentals and growth prospects,” the Bangko Sentral said in a statement.

Data showed that net placements in debt instruments rose 9 percent in January to November to $5.2 billion. Net investments in equity capital reached $2.8 billion, up from $1.8 billion in the comparable period in 2016.

Net inflows in November alone amounted to $869 million, up 16.9 percent from $744 million a year earlier.

“This was due mainly to the 13.1-percent expansion in non-residents’ net placements in debt instruments issued by local affiliates ([intercompany borrowings] to reach $604 million,” it said in a statement.

Net equity capital inflows grew 38.7 percent to $210 million, as equity capital placements of $228 million more than offset the $18-million withdrawals. The bulk of gross equity capital investments came from Singapore, Hong Kong, Luxembourg, China and the United States. 

These were channeled mainly to manufacturing; real estate; electricity, gas, steam and air-conditioning supply; construction; and wholesale and retail trade activities. 

Meanwhile, reinvestment of earnings amounted to $56 million in November.

Earlier, the Bangko Sentral said the country could sustain the FDI inflows to put it at par with the large levels of FDIs seen in neighboring Asian countries. 

It said such potential could be realized by reforming the rules on foreign ownership, addressing infrastructure gaps, and reducing the cost of doing business.

The BSP said among the measures taken to promote a more supportive environment for higher foreign investments were the liberalization of foreign bank entry in the country (Republic Act No. 10641 or the Foreign Bank Liberalization Act passed in July 2014) as well as the phased-in liberalization of the foreign exchange regulatory framework that started In 2007. 

It said “prospects for inward flows of FDI into the country continue to be favorable as both ‘push’ [subdued global economic growth] and, more importantly, ‘pull’ [sustained robust macroeconomic performance and investment grade status] factors remain.”

Topics: Bangko Sentral ng Pilipinas , Investment
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