April foreign direct investment drops 43%

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FOREIGN direct investment (FDI) in the Philippines fell 43 percent in April from a year earlier due mainly to the decline in non-residents’ net placements in debt instruments, the central bank said on Friday.

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FDI in April reached $382 million, down nearly half from $671 million recorded in the same month last year, according to data released by the Bangko Sentral ng Pilipinas (BSP).
Net FDI flows in April, however, registered a 66-percent increase from $229 million in March.

Cumulative FDI in the first four months totaled $1.2 billion, down 48.3 percent from $2.4 billion in the same period last year.

Intercompany borrowings or non­residents’ net placements in debt instruments issued by local affiliates declined by 52.5 percent to $276 million in April from $582 million a year earlier.

For the first four months of the year, intercompany borrowings dropped 53.8 percent to $688 million from $1.488 billion.

Meanwhile, inflows into equity capital significantly rose by 120.8 percent to $25 million from $11 million.

Placements to these investments reached $39 million, exceeding withdrawals that amounted to $14 million during the month.

Most of the equity capital investment originated from the United States, the United Kingdom, Hong Kong, Germany, and Luxembourg and were channeled mainly to real estate; manufacturing; administrative and support service; financial and insurance; and wholesale and retail trade activities, the BSP said.

From January to April, equity placements posted a net inflow of $279 million, down 50.5 percent from $565 million on-year.

On the other hand, reinvested earnings rose to $81 million in April from $78 million a year earlier. On a cumulative basis, reinvested earnings dropped 20.4 percent to $266 million in the first four months from $334 million a year earlier.

The central bank expects FDI net inflow to reach $6 billion for full-year 2015.

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