Net foreign direct investments (FDI) hit a 16-month high in August but reckoned from January these were still lower compared to last year, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
At $1.20 billion, August’s net inflow was 70 percent higher year on year and was also the biggest since April 2016’s $2.24 billion.
“This reflected continued favorable investor sentiment on the Philippine economy on the back of the country’s strong macroeconomic fundamentals,” the Bangko Sentral said in a statement.
The rise was mainly attributed to a surge in net equity capital, which posted net inflows of $611 million in August, significantly higher compared to $8 million a year earlier.
Equity capital placements totaled $630 million, outpacing the $19 million in withdrawals during the month.
The BSP said the bulk of the inflows came from the United States, Singapore, the Netherlands, Hong Kong and Japan.
The funds were channeled primarily into manufacturing; real estate; wholesale and retail trade; transportation and storage; and electricity, gas, steam and air conditioning supply activities.
Investments in debt instruments, meanwhile, posted a 15.7-percent decline to $533 million.
Reinvested earnings also dropped by 12.8 percent to $59 million.
August’s surge was not enough to boost net FDI flows for the first eight months of 2017, which were down 5.2 percent year-on-year to $5.1 billion.
The central bank data said this was due to a 40.3-percent decline in net equity capital to $883 million.
Placements during the period came mostly from the United States, Singapore, Japan, the Netherlands, and Hong Kong.
Net placements in debt instruments expanded by 8.4 percent to $3.67 billion. Reinvested earnings reached $546 million, up 6.4 percent.
The Bangko Sentral raised its 2017 net FDI forecast to $8 billion in June, from $7 billion previously, citing improved domestic indicators and expected global uptick.