Foreign investments surge to $5.9b

Net inflows of foreign direct investments jumped 25 percent in the first nine months to $5.9 billion from $4.7 billion a year ago, on sustained investors’ confidence in the economy.

Bangko Sentral said the nine-month figure increased from a year earlier, despite the big decline in September’s investments. The nine-month tally also surpassed the full-year figure of $5.7 billion in 2015.

“The continued FDI inflows reflect investors’ confidence in the country’s economy on account of sustained growth prospects and strong macroeconomic fundamentals,” Bangko Sentral said in a statement.

Data showed net inflows of FDIs fell 69.3 percent in September to $469 million from $1.5 billion in the same period last year, pulled down by lower investments in debt instruments.

The September figure was also 34 percent lower than $711 million net inflows registered in August 2016.

Investments in debt instruments recorded lower net inflows of $296 million in September, a 66.3-percent decrease from the year-ago level. Equity capital posted net inflows of $138 million during the month, also down from $600 million in the same period last year.

Equity capital placements in September came mainly from Japan, Taiwan, Germany, the Netherlands and the United States and were channeled into manufacturing; real estate; wholesale and retail trade; financial and insurance; and administrative and support service activities.

Meanwhile, the nine-month FDI tally rose on higher investments in debt instruments and net equity capital placements.

Investments in debt instruments, or lending by parent companies abroad to their local affiliates to fund existing operations and business expansion, contributed largely to net inflows during the nine-month period, registering an increase of 41 percent to $3.7 billion from $2.6 billion last year.

Net equity capital placements increased 9.3 percent to $1.6 billion as gross placements of $1.9 billion more than offset withdrawals of $248 million. 

Gross equity capital placements in the first nine months came mainly from Japan, Singapore, the US, Hong Kong and Taiwan.

These placements were largely invested in financial and insurance; manufacturing; real estate; accommodation and food service; and wholesale and retail trade activities.

FDI net inflows hit $5.72 billion in 2015.

Bangko Sentral expects net inflows to reach $6.3 billion in 2016, on the back of improving global economic conditions and robust domestic economy.

Bangko Sentral said earlier the implementation of various private-public partnership projects, particularly in infrastructure, would give a strong signal to investors, boosting their confidence to invest in the country.

Bangko Sentral’s statistics on foreign direct investments cover actual investment inflows, which are in the forms of equity capital, reinvestment or earnings and borrowings between affiliates.

Bangko Sentral’s FDI data include investments where ownership by the foreign enterprise is at least 10 percent.

Topics: Foreign direct investments , Bangko Sentral ng Pilipinas
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