Net inflow of foreign direct investments in March this year jumped 27 percent to $682 million from $537 million a year ago, on investors’ positive outlook on the Philippine economy, the Bangko Sentral ng Pilipinas said Monday.
“FDI inflows rose during the month as net equity capital increased markedly on the back of higher gross placements of equity capital ($351 million from $51 million) and lower withdrawals ($33 million from $42 million),” Bangko Sentral said in a statement.
Equity capital infusions came mostly from Singapore, Hong Kong, Japan, the United States, and Sweden. These were channeled largely to manufacturing, real estate, art, entertainment and recreation, and financial and insurance activities.
Non-residents’ investments in debt instruments issued by local affiliates (or intercompany borrowings) posted net inflows of $301 million, albeit lower by 36.1 percent compared to its year-ago level.
Meanwhile, reinvestment of earnings increased 12.6 percent to $63 million in March 2018 from $56 million in March 2017.
FDI net inflows in the first quarter of 2018 totaled $2.2 billion, an increase of 43.5 percent from $1.5 billion in the comparable period last year.
“This reflected investors’ continued positive outlook on the Philippine economy on the back of sound macroeconomic fundamentals and robust growth prospects,” the regulator said.
Net equity capital for the quarter increased more than six-fold to $887 million from a year ago as gross placements of $996 million more than compensated for the withdrawals of $109 million.
Equity capital placements originated mainly from Singapore, Hong Kong, China, Japan, and Taiwan. The bulk of the placements were invested in manufacturing, financial and insurance, real estate, arts, entertainment and recreation, and electricity, gas, steam and air-conditioning supply activities.
Net investments in debt instruments reached $1.1 billion, down 8.2 percent from $1.2 billion in the previous year. Reinvestment of earnings was steady at $193 million.
Earlier, Bangko Sentral Governor Nestor Espenilla Jr. said he was expecting the growth momentum of foreign direct investments to be sustained this year, citing a number of drivers for expansion such as the country’s solid macroeconomic fundamentals and strong partnerships with traditional and non-traditional trading partners.
“We’re certainly hopeful because there are many drivers for more FDI. Among other things, the growth momentum is strong, we are opening new relationships across borders beyond Asean and Greater Asia so we have more expectations of increased FDI,” Espenilla said.
Espenilla said the ambitious “ Build, Build, Build” program of the Duterte administration was expected to create private sector demand.
“Also, independent analysts recognize that there are real changes happening. From those angles, I think we have a fairly optimistic outlook on FDI,” Espenilla said.