Investor confidence pushed net foreign direct investment (FDI) inflows to increase by 109 percent, reaching $2.2 billion in the first semester of the year.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said that the January to June 2013 FDI figure was higher compared to the level posted in the same period last year.
“This reflected the favorable sentiment of investors on the Philippine economy, on the back of string macroeconomic fundamentals,” it stated.
The Philippine economy surpassed the government target when it expanded by 7.5 percent in the second quarter of the year, bringing the average for the first semester to 7.6-percent growth.
By FDI component, gross equity capital placements aggregated $2 billion, 58.7 percent higher compared to the year-ago level of $1.2 billion.
The central bank added that equity capital investments came from Mexico, Japan, United States and the British Virgin Islands.
FDIs were channeled to manufacturing; water supply, sewerage, waste management and remediation; financial and insurance; arts, entertainment and recreation; and real estate.
Nonresidents’ net placements in debt instruments issued by local affiliates (or intercompany borrowings between foreign direct investors and their subsidiaries/affiliates in the Philippines in the form of loans and debt securities) totaled $1.2 billion in January to June 2013.
The BSP added that this level was “close to fourfold” the $295 million recorded in the same period last year.
“Parent companies abroad continue to lend funds to their local subsidiaries/affiliates to sustain existing operations or expand their businesses in the country,” it said.
Reinvestment of earnings reached $386 million in the first semester of 2013, as foreign investors opted to hold their earnings locally on expectations of sustained strong Philippine economic performance.
Meanwhile, the BSP said that it recorded net outflows of $61 million in June, a reversal of the $307 million recorded in the same month last year.
Equity capital investments yielded net outflows of $193 million, as withdrawals of $283 million more than offset gross placements of $91 million.