Net inflows of foreign direct investment (FDI) to the Philippines eased in October from the preceding month, although the level remained far above that of the year-earlier, with a 102.7 percent increase recorded for October 2013, the latest data from the central bank shows.
Cumulative net inflows for the 10 months to October 2014 surpassed the central bank’s projection of $4.4 billion for the full-year 2014 by almost 21 percent.
Net FDI inflows for October stood at $444 million, down by 34 percent from $680 million in September, figures released by the Bangko Sentral ng Pilipinas (BSP) showed on Monday.
Year-on-year, net FDI inflows for the month in review stood more than twice the amount of $219 million recorded in October 2013.
The cumulative net FDI inflows amounted to $5.32 billion, higher by 641 percent than the $3.24 billion posted in the year-earlier period.
The increase in net inflows during the period was driven by “a favorable investor outlook on the Philippine economy on the back of sound macroeconomic fundamentals,” the BSP said.
Equity capital inflows
The BSP said the bulk of the increase in FDI was due to a $213 million net inflow in equity capital placements, up from a $73 million net inflow seen a year earlier.
Placements worth $217 million offset withdrawals of $4 million.
The bulk of the equity capital investment for October originated mainly from the United States, Germany, Singapore, the United Kingdom, and Japan, and were channeled to activities related to financial and insurance; manufacturing; real estate; wholesale and retail trade; and administrative and support service sectors, the BSP said.
For the first 10 months of the year, these placements posted a net inflow of $1.35 billion, or 88.9 percent higher than the year-ago level of $716 million.
Meanwhile, intercompany borrowings, or non-residents’ net placements in debt instruments issued by local affiliates in October rose to $168 million from $96 million in the same period last year. Intercompany borrowings for the first 10 months expanded by 55.4 percent to $3.26 billion from $2.10 billion a year ago.
Reinvested earnings increased to $63 million in October 2014 from $49 million a year earlier. On a cumulative basis, reinvestment of earnings rose 65.4 percent to $713 million from $431 million a year earlier.