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Foreign direct investments soared to $7.4 billion in 8 months

Net inflows of foreign direct investments jumped 31 percent in the first eight months to $7.4 billion from $5.7 billion a year ago, reflecting investors’ optimism on the Philippine economy, the Bangko Sentral ng Pilipinas said Monday.

“FDl inflows remained strong amid continued favorable investor sentiment on the Philippine economy on the back of the country’s strong macroeconomic fundamentals and growth prospects,” the BSP said in a statement.

Net equity capital investments grew more than twice to $2 billion in January to August from $990 million in the same period last year. Equity capital placements increased 63.7 percent to $2.2 billion, while withdrawals declined 45.9 percent to $196 million. 

Equity capital infusions came mainly from Singapore, Hong Kong, the United States, Japan, and China. 

Data showed that these investments went mostly into firms engaged in manufacturing, financial and real estate, arts, entertainment and recreation, and electricity, gas, steam and air-condition in supply activities. 

Investments in debt instruments increased 17.9 percent to $4.9 billion from $4.1 billion last year. Meanwhile, reinvestments of earnings reached $536 million during the period. 

The BSP said net inflows in August fell 41.2 percent to $752 million from $1.3 billion recorded in the same period last year.  

“Even as all FDl components registered positive balances, inflows were lower than the levels posted in August 2017,” the BSP said.

The bulk of the FDl net inflows was in the form of investments in debt instruments (consisting mainly of intercompany borrowings/Iending between foreign direct investors and their subsidiaries/affiliates in the Philippines), which reached $534 million. 

Finance Secretary Carlos Dominguez III earlier said President Rodrigo Duterte made the country a safer place for investors, with his campaign against corruption and criminality leading to a decrease in crime volume by 21.86 percent since the start of his administration.

Dominguez said the increasing volume of FDIs supported the administration’s efforts to shift the economy from consumption- to investment-led growth, which would then help create decent, well-paying jobs for the country’s young, well-trained Filipinos.

Foreign businessmen brought a record $10 billion worth of investments into the country in 2017, up by 21.5 percent from 2016. This year, the government expects net FDIs to hit $9.2 billion.

American financial and business news website Business Insider put the Philippines on the top of the list of 20 best countries to invest in this year.

Indonesia came in the second place, followed by Poland, Malaysia, Singapore, Australia, Spain, Thailand, India, Oman, Czech Republic, Finland, Uruguay, Turkey, Ireland, the Netherlands, the United Kingdom, Brazil, France, and Chile.

Topics: net inflows , foreign direct investments , Bangko Sentral ng Pilipinas , Rodrigo Duterte
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