Foreign investments sustain rise

Foreign direct investments continued to rise in July, the first month in office of the Duterte administration, bringing the seven-month tally to a record $4.7 billion, amid the sustained investors’ positive outlook on the economy.

Bangko Sentral ng Pilipinas said net inflows of FDIs increased 7 percent in July to $503 million from $470 million a year ago.  This followed a 40.9-percent decline in net inflows in June.

“The increase in FDI inflows was driven by investors’ positive outlook on the Philippine economy, reinforced by strong macroeconomic fundamentals,” Bangko Sentral said in a statement.

Data showed investments in debt instruments grew 79.4 percent in July to $417 million from $232 million a year earlier. Equity capital registered net inflows of $23 million during the month, down by 85.5 percent from a year ago.

Gross equity capital placements in July came largely from Germany, the United States, Singapore, Japan and Korea. These were invested mostly in real estate, wholesale and retail trade, manufacturing, financial and insurance and construction activities.

This brought FDI net inflows in the first seven months to $4.7 billion, up 79 percent year-on-year.

The bulk of net inflows in the first seven months were in the forms of debt instruments which hit $2.8 billion, or more than twice the $1.3 billion recorded in the same period last year.

Equity capital posted net inflows of $1.5 billion in January to July, up by 74.7 percent from $841 million a year ago.

Equity capital placements in the seven-month period came mainly from Japan, Singapore, Hong Kong, the US, and Taiwan. These were invested into financial and insurance, real estate, manufacturing, construction, and accommodation and food service activities.

FDI net inflows hit $5.72 billion in 2015, missing the official target of $6 billion, on lower reinvestment of earnings and debt instruments inflows.

Bangko Sentral expects net inflows of foreign direct investments to increase to $6.3 billion this year, 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 could be in the form 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.

FDI data from investment promotion agencies such as the Board of Investments and Philippine Economic Zone Authority do not use the 10-percent threshold and include borrowings from foreign sources that are non-affiliates of the domestic company.



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