Foreign direct investments climbed 17% $1.6b in 1st quarter

Net inflows of foreign direct investments climbed 16.6 percent in the first quarter to $1.6 billion from $1.3 billion a year ago, reflecting the country’s attractiveness to foreign investors and its strong macroeconomic fundamentals, the Bangko Sentral ng Pilipinas said Tuesday.

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

Equity capital investments posted net inflows of $101 million in January to March, lower than  $550 million a year ago, but net investments of debt instruments more than doubled to $1.3 billion.  

Equity capital infusions came from Japan, the United States, Singapore, Hong Kong and Germany.

These investments went to real estate; wholesale and retail trade; manufacturing; financial and insurance; and information and communication activities. Reinvestment of earnings grew 6.7 percent to $193 million in the three-month period.

Data showed that in March alone, FDI net inflows grew 30.6 percent to $509 million from $390 million in the same month last year.

“Investments in debt instruments, or lending by parent companies abroad to their local affiliates to fund existing operations and business expansion, contributed largely to FDI net inflows during the period, registering an increase of 75.1 percent to $445 million [in March] from $254 million last year,” the regulator said.

Equity capital placements in March mostly came from the United States, Japan, Singapore, Hong Kong and the Netherlands. These were largely placed in real estate; manufacturing; financial and insurance; wholesale and retail trade; and professional, scientific and technical activities. Also, reinvestment of earnings grew 16.1 percent to $56 million in March.

Bangko Sentral Deputy Governor Diwa Guinigundo earlier said the FDI net inflow target of $7 billion this year might be revised upward during the review of economic data middle of the year.  Last year, the FDI figure reached a record $7.9 billion.

Guinigundo said the surge of FDI in 2016 showed that investors were more confident towards the Philippines and that their decision to continue to invest here reflected the steady strong fundamentals of the economy.

Guinigundo expressed optimism that FDI inflows would not be affected by the new policies of US President Donald Trump who vowed to bring jobs back to the US.

The FDI net inflow of $7.9 billion last year surpassed the target of $6.7 billion. The 2016 figure was also 40.7 percent higher than $5.72 billion in 2015.