Net FDI inflow slows in May; 5-mth net doubles

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Jan-May net inflow up 136%

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NET inflow of foreign direct investment (FDI) in the country slowed to $364 million in May as inflows in all components moderated, but net inflow for the five months to May more than doubled to $3.86 billion, central bank data showed on Wednesday.

Net inflow was down 9.6 percent in May from $403 million a year earlier, and was lower by 83.4 percent compared to net inflow of $2.20 billion in April this year.

The Bangko Sentral ng Pilipinas (BSP) said net equity capital investments in May fell 51 percent to $79 million from $160 million a year earlier and were 90 percent lower compared to the $825 million posted in the previous month.

But equity capital placements of $86 million more than offset withdrawals of $8 million, the BSP said.

The bulk of equity capital investments for the month came from Thailand, the United States, Hong Kong, Germany and Singapore, and were channeled mainly to financial and insurance; real estate; manufacturing; wholesale and retail trade; and electricity, gas, steam and air-conditioning activities.

Intercompany borrowings, or non­residents’ net placements in debt instruments issued by local affiliates, grew 15.4 percent to $220 million in May from $191 million a year earlier but were 83 percent lower than the $1.30 billion recorded in April.

Reinvestment of foreign investors’ earnings in May increased by 26.1 percent to $65 million but was 12 percent lower than the April figure of $74 million.

For the first five months of the year, however, FDI net inflows surged 136 percent to $3.86 billion from the $1.63 billion recorded in the same period a year earlier.

“All FDI components registered increases in their net inflows,” the BSP said.

Specifically, it said debt instruments, which contributed largely to the increase in FDI during the five months, grew by 143.7 percent to $2.14 billion from $878 million previously.

Over the five-month period, net inflows of equity capital also increased by more than threefold to $1.39 billion from $440 million a year earlier, the BSP said.

“Investor sentiment was buoyed by the country’s sound macroeconomic fundamentals and its non-inflationary GDP [gross domestic product]growth as well as positive growth prospects for the Philippine economy,” it stated.

The BSP said fresh equity capital infusions amounted to $1.52 billion compared with withdrawals of $125 million.

Equity capital placements during the January to May period came mainly from Japan, Hong Kong, Singapore, the United States, and Taiwan, which were invested mainly in financial and insurance; real estate; manufacturing; construction; and accommodation and food service activities.

Reinvestment of earnings totaled $321 million during the period, 0.8 percent higher than the $318 million recorded a year earlier.

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