Net foreign direct investments (FDI) surged by 76.3 percent in August from a year earlier, driven by intercompany borrowings, but year to date the tally was down 27.1 percent amid continued global uncertainties.
The Bangko Sentral ng Pilipinas on Tuesday reported that FDI had hit $526 million in August, up from the $229 million recorded in same month last year.
“This is on account of the more than seven-fold increase in investments in debt instruments (or intercompany borrowings from foreign direct investors by their subsidiaries/affiliates in the Philippines) to $431 million from $59 million,” the BSP said in a statement.
“The increase in debt instruments more than compensated for the decline in net equity capital investments during the period,” it added.
Net equity capital investments decreased by 81.2 percent as equity capital placements declined by 75.9 percent to $45 million and equity capital withdrawals increased by 43.1 percent to $11 million.
The bulk of equity capital investments came from the United States, Japan, Singapore, Taiwan and Ireland, channeled mainly to manufacturing; real estate; professional, scientific and technical; wholesale and retail trade; and information and communication activities.
Reinvestment of earnings increased by 2.8 percent to $61 million.
For January to August, on the other hand, net FDI inflows declined to $3 billion from $4.1 billion “as all FDI components recorded lower net inflows during the period,” the BSP said.
“In particular, the $1.6 billion net inflows in investments in debt instruments were lower by 35.8 percent for the period January-August 2015, compared to the $2.6 billion net inflows in the previous year,” it noted.
Investments in equity capital registered net inflows of $839 million during the period from $978 million last year. The bulk came from the United States, Singapore, Japan, Hong Kong, and Germany.
These were mainly channeled to manufacturing; financial and insurance; real estate; wholesale and retail trade; and electricity, gas, steam and air-conditioning activities.
Reinvestment of earnings declined by 11.2 percent to US$525 million during the period.
The central bank expects net FDI inflows to hit $6 billion in 2015. Last year saw net FDI hit a record $6.2 billion, topping the BSP’s $4.4-billion forecast.