Net FDI hits 2-mth high in Nov – BSP

Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 11 Feb 2019 16:17:50 +0000

NET foreign direct investment (FDI) inflows hit a two-month high in November 2018 but were still lower from a year earlier, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.

Net inflows dropped by 45.9 percent to $531 million from $982 million in the same month last year but were an improvement from October’s $491 million and the highest since September’s P569 million.

Net foreign direct investment hit a two-month high in November 2018. PHOTO BY ANDREA DE LA CRUZ

It brought the year-to-date tally to $9.06 billion, 3.2 percent lower versus the comparable 2017 period.

The Bangko Sentral ng Pilipinas (BSP) said the year-on-year decline in net FDI for November “was due largely to the drop in net investments in debt instruments (consisting mainly of intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines), which amounted to $333 million from $724 million in the same month in 2017.”

In drop in percentage terms was 54 percent.

The central bank also pointed out that net equity capital inflows during the month dropped to $137 million or 31.9 percent from a year earlier even as placements of $149 million more than offset the $11 million in withdrawals.

“Equity capital placements during the month were sourced largely from Taiwan, the United States, Thailand, Luxembourg, and the Netherlands,” it said.
Reinvestments of earnings were the only positive item for the month, rising by 9.5 percent to $61 million from a year ago.

Net FDI inflows for January to November, meanwhile, were driven largely by $6.18 billion in net investments in debt instruments, which were 9.3 percent higher reckoned from the same 11-month period in 2017.

Net investments in equity capital, on the other hand, fell to $2.13 billion from $2.97 billion in the comparable 2017 period even as gross placements of $2.54 billion more than compensated for withdrawals of $407 million.

Equity capital infusions during the period came mainly from Singapore, Hong Kong, the United States, Japan, 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 2.8 percent higher at $738 million.

The BSP expects net FDI inflows to have reached $10.4 billion last year, higher than an earlier forecast of $9.2 billion.

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