11-mth FDI surpasses BSP estimate by 30%

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Net inflows of foreign direct investment (FDI) to the Philippines reached $5.72 billion from January to November last year, up 61.6 percent than the $3.54 billion posted in 2014.

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The Bangko Sentral ng Pilipinas that the 11 month total surpassed the central bank’s projection of $4.4 billion for the full-year 2014 by almost 30 percent.

Net FDI inflows for the month of November stood at $399 million, down by 10 percent from $444 million in October, figures released by BSP showed Tuesday.

Year-on-year, net FDI inflows for the month was 34.2 percent higher than the $297 million in November 2013.

Equity capital inflows
The BSP said the bulk of the increase in FDI can be traced to the surge in equity capital placements which stood at $201 million from $7 million recorded during the same period in 2013.

“Specifically, the increase in net equity capital was buoyed by the 129.6 percent rise in equity capital placements coupled by the 83.6 percent decline in equity capital withdrawals,” the central bank stated.

In 11-months to November, the net equity capital investments surged by 114.8 percent to $1.55 billion from $723 million, mainly on account of the contraction in equity capital withdrawals by 71 percent, which more than offset the 15.6 percent decline in equity capital placements, it said.

Equity capital investments originated mostly from the United States, Hong Kong, Singapore, Japan and Australia, and were channeled mainly to the financial and insurance sector; manufacturing; real estate; wholesale and retail trade; and transportation and storage activities.

“Meanwhile, reinvestment of earnings and investments in debt instruments posted positive balances albeit lower than what were recorded during the same period a year ago,” the BSP said.

Reinvested earnings eased by 9.4 percent to $50 million in November 2014 from $55 million a year earlier. On a cumulative basis, reinvestment of earnings rose 57 percent to $763 million from $486 million a year earlier.

On the other hand, intercompany borrowings, or non-residents’ net placements in debt instruments issued by local affiliates contracted by 37.1 percent in November to $148 million from $235 million in the same period last year.

However, intercompany borrowings for the first 11 months expanded by 46 percent to $3.40 billion from $2.33 billion a year ago.

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