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By Maricel E. Burgonio, Reporter
FOREIGN direct investment (FDI)
in the first seven months of the year fell, with the Bangko Sentral
ng Pilipinas (BSP) blaming the decline on the global economic
slowdown.
In a statement, the Bangko
Sentral said FDI registered a smaller net inflow of $147 million in
July this year, or nearly 70 percent lower than the $478 million in
the same month last year.
This brought the seven-month
figure to $960 million, or 60.2 percent lower than the $2.4 billion
in the same period last year.
“The ongoing financial crisis,
particularly in the major advanced economies continued to weigh down
on investor sentiment, central bank Deputy Gov. Nestor Espenilla
said.
Month-on-month, FDI had improved
to a net inflow of $147 million in July from the $12-million outflow
in June this year.
Espenilla said the net inflows in
July were due largely to higher gross equity capital placements,
which rose by a hefty 92.6 percent to $235 million as a result of
investments for the rehabilitation of a hydropower facility in
northern Luzon.
Investments came primarily from
the US, Japan, Singapore, South Korea, Germany and Malaysia.
Reinvested earnings also rose
year-on-year to $81 million, almost six times higher than the
year-ago level. These inflows were, however, mitigated by the
$163-million net outflow in the other capital account arising from
intercompany loan repayments to foreign direct investors and trade
credit extended to affiliates abroad.
Gross equity capital placements
amounted to $904 million and were channeled mainly to manufacturing
particularly in shipbuilding and repair, auto electronics parts and
components, paper products as well as services, mining, construction
of hotel/leisure and resort and water spa development.
Investments also include a power
plant facility, hydropower facility rehabilitation, real estate and
financial institutions.
The other capital account,
consisting mainly of intercompany borrowing and lending between
foreign direct investors and their subsidiaries or affiliates in the
Philippines, reversed to a net outflow of $35 million, because of
intercompany loan repayments and higher trade credit extended to
affiliates abroad. The higher unremitted profits of the local
branches of foreign banks, however, mitigated the impact of these
outflows.
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