Net FDI rises in Aug – BSP

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FOREIGN direct investment (FDI) rose in August from a year earlier on higher intercompany borrowings, the central bank reported Thursday.

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Net FDI rose by 32 percent at $711 million in August from $539 million year-on-year, according to the Bangko Sentral ng Pilipinas (BSP).

“This is on account of the 44.2 percent increase in investments in debt instruments (or intercompany borrowings) to $636 million from $441 million in August 2015,” the BSP said in a statement.

The increase in investments in debt instruments more than compensated for the decline in net equity capital investments at $8 million from $37 million. Placements reached $49 million while withdrawals stood at $41 million.

The bulk of equity capital investments came from the United States, Singapore, the Netherlands, Japan, and Hong Kong, and was channeled mainly to real estate, manufacturing, wholesale and retail trade, as well as electricity, gas, steam and air-conditioning supply, and arts, entertainment and recreation activities.
Reinvested earnings grew by 9.9 percent at $67 million.

In the first eight months of 2016, net FDI inflows reflected a year-on-year increase of 71.1 percent at $5.4 billion.

“The sustained FDI inflows were buoyed by investors’ confidence in the economy on the back of the country’s sound macroeconomic fundamentals,” the BSP said.

Investment in debt instruments amounted to $3.4 billion, up 94.4 percent from $1.8 billion.

Net equity capital placements likewise grew by 68.3 percent at $1.5 billion from $877 million.

“This developed as equity capital placements increased by 53.4 percent while withdrawals dropped by 2.4 percent,” the central bank said.

Equity capital placements came largely from Japan, Singapore, Hong Kong, the United States, and Taiwan, and were invested mainly in financial and insurance, real estate, manufacturing, construction, and accommodation and food service activities.

Reinvested earnings reached $513 million in the eight months to August.

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