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Foreign direct investments surged 70% to $1.2b in August

NET inflow of foreign direct investments rose to a 16-month high of $1.2 billion in August, up 70 percent from $708 million year-on-year, on favorable investors’ sentiment on the Philippine economy, Bangko Sentral ng Pilipinas said Friday.

The August net inflow was also significantly higher than $307 million a month ago.

Bangko Sentral said in a statement sustained positive investors’ sentiment on the Philippine economy was “backed by the country’s strong macroeconomic fundamentals.”

“All FDI components posted net inflows during the period. In particular, net equity capital investments surged to $611 million from $8 million a year ago. The bulk of these placements originated from the United States, Singapore, the Netherlands, Hong Kong and Japan,” the regulator said.

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

Investments in debt instruments amounted to $533 million, down 15.7 percent from last year’s level. Meanwhile, reinvestment of earnings was pegged at $59 million during the month.

Finance Secretary Carlos Dominguez III earlier cited the $2.3-billion capital infusion recently by two global companies in the manufacturing and energy sectors. 

These are the $1-billion investment by Japan Tobacco International in acquiring the assets of cigarette manufacturer Mighty Corp., and the separate $1.3-billion deal between Energy Development Corp. and a consortium of foreign investors backed by Macquarie Infrastructure and Real Assets and Arran Investment Pte. Ltd., an affiliate of Singaporean sovereign wealth fund GIC.

Net FDI inflows, however, declined 5.2 percent from January to August to $5.1 billion from $5.4 billion a year ago, pulled down by lower equity capital placements and higher withdrawals during the period, decreasing net equity capital investments by 40.3 percent to $883 million from $1.5 billion.

Dominguez last month downplayed what he called “unfounded” concerns of some quarters over the supposed drastic drop in the flow of foreign direct investments in the country, saying critics failed to present the complete picture, omitting reinvestments that should have been included in assessing FDI data. 

“(These quarters have) not captured the entire data, and reinvestments by foreign companies in the Philippines have actually been quite healthy,” Dominguez said at a recent forum on the Philippine economy in Washington D.C. 

Topics: Bangko Sentral , Philippine economy , Carlos Dominguez III , Japan Tobacco , Mighty Corp. , Japan Tobacco
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