Foreign direct investments jumped 166% in July

Net inflows of foreign direct investments jumped 166 percent in July to $914 million from $344 million a year ago, as investors continued to view the Philippines as one of the best places to invest in, the Bangko Sentral ng Pilipinas said Wednesday.

The August net FDIs also exceeded the $831-million net inflow in June. The figure brought the total net inflows in the first seven months to $6.7 billion, up 52 percent from $4.4 billion in the same period last year.

“This reflected the continued positive investor sentiment on the Philippine economy on the back of strong macroeconomic fundamentals and growth prospects,” the BSP said in a statement.

More than 60 percent of FDI net inflows in July were in the form of non-residents’ investments in debt instruments issued by local affiliates (inter-company borrowings), which expanded to $584 million from $136 million in the same period last year. 

Net equity capital investments grew 90.2 percent to$261 million from $137 million in 2017. This was on account of the 60.6-percent increase in equity capital placements to $278 million, coupled with the decline in withdrawals by 52.3 percent to $17 million. 

Equity capital placements came mainly from Singapore, Taiwan, the United States, Korea and Japan. These investments were channeled to manufacturing; financial and insurance; real estate; wholesale and retail trade; and administrative and support service activities. 

Reinvestment of earnings amounted to $69 million during the month. 

The BSP said the 52-percent increase in net inflows in January to July was led by the expansion in net equity capital investments by more than five times to $1.8 billion from $338 million last year. 

Gross equity capital placements grew by almost thrice to $2 billion, while withdrawals declined to $180 million. Equity capital placements during the period came mainly from Singapore, Hong Kong, Japan, the United States and China.

Investments were infused mostly in manufacturing; financial and insurance; real estate; arts, entertainment and recreation; and electricity, gas, steam and air-conditioning supply activities. 

Investment in debt instruments expanded 21.8 percent to $4.3 billion from $3.6 billion last year. Meanwhile, reinvestment of earnings slightly rose to $489 million during the period. 

Finance Secretary Carlos Dominguez III earlier said President Rodrigo Duterte has 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 also said the increasing volume of FDIs supported the Duterte administration’s efforts to shift the economy from consumption- to investments-led growth, which would then help create decent, well-paying jobs for the country’s young, well-trained Filipinos entering the workforce in the coming years.

Foreign businessmen brought a record $10 billion in investments last year, up 21.5 percent from the previous year.

Topics: Foreign direct investments , Bangko Sentral ng Pilipinas , BSP
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