• 2014 net FDI hits record $6.2B

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    Net inflows of foreign direct investment (FDI) to the Philippines reached an all-time high of $6.2 billion in 2014 as the country’s solid macroeconomic fundamentals continued to attract investors, the central bank said on Tuesday.

    Data from the Bangko Sentral ng Pilipinas (BSP) showed net FDI in 2014 rose 65.9 percent from $3.7 billion a year earlier.

    Net FDI for 2014 was also 41 percent higher than the central bank’s projection of $4.4 billion for the year.

    “FDI inflows remained robust, buoyed by strong investors’ confidence in the country’s macroeconomic fundamentals,” the BSP stated.

    Equity capital inflows up 206%
    The BSP said net equity capital infusion during the year rose by 206.7 percent to $2 billion from $664 million in 2013 on account of a 6.2 percent increase in equity capital placements coupled with a 67.8 percent decline in equity capital withdrawals.

    Equity capital investments came mostly from the United States, Hong Kong, Singapore, Japan, and the United Kingdom, and were channeled mainly to financial and insurance; manufacturing; real estate; mining and quarrying; and wholesale and retail trade sectors.

    Likewise, intercompany borrowings grew by 26.1 percent to $3.3 billion from $2.7 billion in 2013, while reinvestment of earnings expanded by 94.8 percent to $819 million from $420 million a year earlier.

    Dec FDI up five-fold
    For the month of December 2014, the BSP data showed FDI net inflows amounted to $557 million, more than five-fold the $102 million recorded in the same month a year ago.

    The central bank said net equity capital infusion was the main contributor to the increase in FDI net inflows during the month, reversing to $482 million net inflows from $60 million net outflows for the same period in 2013.

    “The increase in net equity capital investments was brought about by the 1,465.7 percent expansion in equity capital placements and the 10.7 percent decline in equity capital withdrawals,” the central bank explained.

    The bulk of equity capital investments in December 2014—coming largely from the United States, Hong Kong, the United Kingdom, South Korea and Singapore—were channeled to financial and insurance; mining and quarrying; real estate; manufacturing; and information and communication sectors.

    Reinvested earnings in December increased by 21.7 percent to $56 million from $46 million a year earlier.

    Lastly, the BSP said the decline in investments in debt instruments to $19 million from $116 million a year ago partially tempered the growth in FDI in December as significant repayments for intercompany loans during the month amounted to $270 million.

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