Foreign direct investments (FDI) went down by 85.7 percent to reach $17 million in May 2013.
A statement from the Bangko Sentral ng Pilipinas (BSP) said that higher withdrawals of equity capital and net repayments of debt instruments dragged down FDIs in May compared to the level recorded in the same month last year.
The central bank said that equity capital resulted in net outflows of $14 million compared to net inflows of $58 million in 2012, as equity withdrawals of $90 million offset gross equity capital placements of $76 million.
Gross equity capital placements mostly came from the United States, Japan, Italy and Germany.
The BSP added that the FDIs were channeled mainly to real estate activities, manufacturing, agriculture, fishery and fishing, wholesale and retail trade, and construction. Nonresidents’ placements in debt instruments issued by local affiliates registered a net outflow of $36 million.
Reinvestment of earnings amounted to $67 million, lower by 30.3 percent than the year-ago level of $98 million.
On the other hand, the central bank said that net foreign direct investment (FDI) inflows in January to May 2013 amounted to $1.5 billion. Gross equity capital placements, which represent the bulk of FDI inflows, rose by 61.1 percent in the first five months of 2013 to reach $1.8 billion compared to the $1.1 billion in the same period in 2012.
“This reflected favorable investor interest on the back of the country’s sound macroeconomic fundamentals,” it stated.
The bulk of these equity capital investments came mainly from Mexico, Japan, the United States, Malaysia and the British Virgin Islands. These FDIs were directed to manufacturing activities; water supply, sewerage, waste management and remediation; real estate activities; arts, entertainment and recreation activities; and financial and insurance activities.
Notwithstanding the increase in gross equity capital infusion, net FDI inflows during the period was lower by 8.7 percent relative to its year-ago level of $1.7 billion, the BSP noted.
“This developed as gross equity capital placements were offset by withdrawals of $947 million [higher than the $105 million recorded in the same period last year], resulting in net equity capital inflows of $846 million, a decline of 16.1 percent from the level posted a year ago,” it stated.