Net FDI hits 2-month high in July
NET foreign direct investment (FDI) inflows rose in July from a year earlier and also hit a two-month high, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday.
Net inflows for the month surged by 165.5 percent to $914 million from $344 million last year with the bulk coming from intercompany loans, central bank data showed.
The result—up from June’s $831 million and the highest since the P1.645 billion posted in May this year—brought the year-to-date tally to $6.669 billion, 52.1 percent higher compared the same period last year.
“This reflected the continued positive investor sentiment on the Philippine economy on the back of strong macroeconomic fundamentals and growth prospects,” the Bangko Sentral said in a statement.
Non-residents’ net placements in debt instruments issued by local affiliates or intercompany borrowings amounted to $584 million in July, up 328.1 percent from a year ago.
The BSP noted net equity capital inflows during the month rose to $261 million as placements of $278 million more than offset the $17 million in withdrawals.
“Equity capital placements were sourced primarily from Singapore, Taiwan, the United States, Korea and Japan,” it said.
Reinvestments of earnings, meanwhile, decreased by 2.3 percent to $69 million in July from a year ago.
Net FDI inflows for January to July were driven largely by $4.335 billion in net investments in debt instruments, which were 21.8 percent higher reckoned from a year earlier.
Net investments in equity capital, meanwhile, surged to $1.845 billion from $338 million in the comparable 2017 period as gross placements of $2.025 billion more than compensated for withdrawals of $180 million.
Equity capital infusions during the period came mainly from Singapore, Hong Kong, Japan, the United States and
China, and were invested in manufacturing; financial and insurance; real estate; arts, entertainment and recreation; and electricity, gas, steam and air-conditioning supply activities.
Reinvestments of earnings were also higher at $489 million, the Bangko Sentral said.
The central bank expects net FDI inflows to reach $9.2 billion this year, which it said would be “driven primarily by the sustained positive developments in the domestic economy, expected improvement in global economic conditions relative to 2017 as well as the implementation of public-private partnership projects that were approved/awarded in the previous years, when most projects started.”
“FDI uptick is further seen in 2018 in line with the continued fast-tracking and modernization of the country’s soft and hard infrastructure, growing interest from non-traditional investment sources, and improved global perception of the Philippines as an investment destination,” it added.
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