NET foreign direct investment (FDI) started the year with double-digit growth in January from a year earlier, as sustained inflows in inter-company borrowings outpaced outflows of equity capital and a decline in reinvested earnings.
Bangko Sentral ng Pilipinas (BSP) data showed that net FDI inflows rose by 13.2 percent to $685 million in January from $605 million a year earlier.
“This developed as investors remain optimistic on the growth potential of the economy, backed by strong macroeconomic fundamentals,” the BSP said on Monday.
It said net availment of debt instruments spiked by 122.6 percent to $566 million from $254 million in January 2016.
Equity capital investments saw net inflows of $48 million, but declined by 82.8 percent from $277 million.
“The $48 million net inflows of equity capital resulted, as placements of $63 million more than offset withdrawals of $15 million,” the BSP said.
Equity capital placements originated mainly from Germany, Singapore, Hong Kong, the United States and Japan, and was infused largely into electricity, gas, steam and airconditioning supply; construction; wholesale and retail trade; administrative and support services; and financial and insurance activities.
Reinvestment of earnings declined by 3.1 percent to $71 million from $73 million.
Earlier, the BSP said it saw continued inflow of FDI into the Philippines this year as the country remains an attractive destination for investors given a large economically active population, vibrant industrial activity and solid macroeconomic fundamentals.
FDI inflow “is going to continue, given the [country’s] sustained economic growth, which is broad-based. Manufacturing, for instance, is picking up again in addition to the usual sources of growth, like services—this will continue to be an attraction,” Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. had said.
“There is a huge market that can be tapped here in the Philippines. Remember we have an average age of 23.9 years or so, one of the youngest in the region, and foreign investors are taking a closer look at what are the opportunities here, given that we have a growing economy, young and economically active population, and sustained macro-economic conditions,” Tetangco added.
In 2016, the Philippines received net FDI inflows of $7.93 billion, up 40.7 percent from $5.63 billion in 2015 and surpassing the BSP’s $6.7-billion projection by 18.4 percent.