Net inflows of foreign direct investments jumped 76.3 percent in August to $526 million from $299 million a year ago, Bangko Sentral ng Pilipinas said Tuesday.
This brought net inflows of FDIs to $3 billion in the first eight months, down by 27 percent from $4.1 billion recorded in the same period last year.
Bangko Sentral said FDIs rebounded in August, on the back of higher inter-company borrowings between foreign parent companies and local subsidiaries.
Debt instruments, or inter-company borrowings, rose to $431 million in August from $59 million a year ago.
“The increase in debt instruments more than compensated for the decline in net equity capital investments during the period,” Bangko Sentral said in a statement.
Net equity capital investments, however, fell 81.2 percent as equity capital placements slowed to 75.9 percent to $45 million and equity capital withdrawals increased 43 percent to $11 million.
The bulk of equity capital investments in August came from the United States, Japan, Singapore, Taiwan and Ireland. These were channeled mainly to manufacturing; real estate; professional, scientific and technical; wholesale and retail trade; and information and communication activities.
Reinvestment of earnings increased 2.8 percent to $61 million in August.
Bangko Sentral said in the first eight months, all FDI components recorded lower net inflows. The $1.6-billion net inflows in investments in debt instruments were lower by 35.8 percent than $2.6 billion a year earlier.
Net inflows of investments in equity capital also declined to $839 million from $978 million a year ago.
Foreign direct investments posted a record $6.2-billion net inflows in 2014, or 65.9 percent higher than $3.737 billion net inflow registered in 2013.
Bangko Sentral was expecting net FDI flows to reach $6 billion this year, taking into consideration the expected global growth recovery in 2015.
Bangko Sentral reviews the FDI target twice a year, alongside other economic data such as the balance of payments, foreign portfolio investments and remittances.
Bangko Sentral’s statistics on foreign direct investments cover actual investment inflows, which could be in the form of equity capital, reinvestment or earnings, and borrowings between affiliates.
These data include investments where ownership by the foreign enterprise is at least 10 percent.
Meanwhile, FDI data of investment promotion agencies such as the Board of Investments and Philippine Economic Zone Authority, do not make use of the 10-percent threshold and include borrowings from foreign sources that are non-affiliates of the domestic company.