Foreign direct investment inflows climbed 46.4% to $573-million in February

Net inflows of foreign direct investments jumped 46.4 percent in February to $573 million from $392 million a year ago on investors’ sustained confidence in the economy, the Bangko Sentral ng Pilipinas said Thursday.

“The sustained investment inflows reflect investor confidence in the country’s sound macroeconomic fundamentals and growth prospects,” the Bangko Sentral said in a statement.

The February figure, however, was lower than the $919-million net inflow registered in January 2018. The figure brought the total FDI net inflows in the first two months to $1.493 billion, up 52.6 percent from the $978-million net inflow in the same period last year.

“This was due mainly to the 56.3-percent growth in investments in debt instruments [or intercompany borrowings between foreign direct investors and their subsidiaries/affiliates in the Philippines], amounting to $412 million,” the Bangko Sentral said.

Net equity capital surged 55.4 percent to $96 million, as gross placements of $114 million more than compensated for the withdrawals of $18 million.

Equity capital placements came mostly from Hong Kong, the United States, China, the Netherlands, and Japan. The said placements were invested mainly in art, entertainment and recreation; real estate; manufacturing; construction; and electricity, gas, steam and air-conditioning supply activities.

Meanwhile, reinvestment of earnings amounted to $65 million during the period.

Net investments in debt instruments reached $793 million in the first two months, representing a 10-percent growth from a year earlier.

Net equity capital increased more than fourfold to $569 million in the two-month period. The bulk of the equity capital placements came primarily from Singapore, China, Hong Kong, Taiwan and Japan.

Bangko Sentral Governor Nestor Espenilla Jr. earlier said he was expecting the growth momentum of foreign direct investments to be sustained this year, as he cited several drivers for expansion such as the country’s solid macroeconomic fundamentals and strong partnerships with traditional and non-traditional trading partners.

“We’re certainly hopeful because there are many drivers for more FDI. Among other things, the growth momentum is strong, we are opening new relationships across borders beyond Asean and Greater Asia so we have more expectations of increased FDI,” Espenilla said.

Espenilla said the ‘Build, Build, Build’ program of the Duterte administration was expected to create private sector demand.

“Also, independent analysts recognize that there are real changes happening. From those angles, I think we have a fairly optimistic outlook on FDI,” Espenilla said.

Net inflows of foreign direct investments jumped 21.4 percent to a record $10.049 billion in 2017 from $8.280 billion in 2016.

The full-year net inflow of $10 billion also surpassed Bangko Sentral’s earlier projection of an $8-billion net inflow for 2017.

Topics: foreign direct investments , Bangko Sentral ng Pilipinas , Build , Build , Build program
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