NET inflows of foreign direct investments in 2015 missed the Bangko Sentral ng Pilipinas’ official target of $6 billion due to lower reinvestment of earnings and debt instruments inflows.
Bangko Sentral data released Friday showed net inflows last year reached $5.72 billion, 5 percent lower than the $6-billion target. They were also 0.3 percent lower than the revised $5.74-billion net inflows in 2014.
Debt instruments declined to $3.1 billion from $3.3 billion, while reinvestment of earnings fell 14.8 percent to $747 million on year.
However, net placements in equity capital increased by 15.1 percent to $1.8 billion from $1.6 billion, partially compensating for the declines registered in the other FDI components.
“Equity capital placements originated mainly from the United States, the Netherlands, Japan, the United Kingdom and Singapore. By economic activity, equity capital investments were infused mainly to manufacturing; financial and insurance; real estate; wholesale and retail trade; and construction activities,” Bangko Sentral said in a statement Friday.
FDI net inflows in December declined 51 percent to $273 million from $561 million on year. The December figure was also lower than the $464-million net inflows in November.
“… More than half of the FDI net inflows during the month were investments in debt instruments, consisting largely of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines which amounted to $140 million. This level was seven times the $20 million registered in December 2014,” Bangko Sentral said.
The other FDI components also posted net inflows. Net equity capital infusion reached $77 million as equity capital placements of $97 million more than offset the $20-million withdrawals. These equity capital placements were channeled to financial and insurance; manufacturing; real estate; electricity, gas, steam and air conditioning supply; and administrative and support services activities.
The bulk of equity capital investments during the period came mostly from Singapore, the United States, Japan, the Republic of Korea, and the Netherlands. Meanwhile, reinvestment of earnings amounted to $56 million during the month.
Bangko Sentral in December retained its previous forecast of $6 billion FDI net inflows in 2015, which was the same level that it initially projected last May. The retention of the target was in line with the sustained positive developments in the domestic economy and some improvement in the global economic conditions as well as the implementation of PPP projects that were awarded earlier–in 2014 and 2015.