FOREIGN direct investment (FDI) in the Philippines grew by 1.6 percent in July but the year to date tally remains well below 2014 figures, preliminary central bank data showed on Monday.
FDI in July stood at net $458 million, up from the $451 million recorded in the same month last year, the Bangko Sentral ng Pilipinas (BSP) reported.
The year-on-year figure reversed of the contractions seen since March and the central bank claimed it reflected investor confidence in the country’s “sound financial system.”
In the year to date, however, net FDI inflows were down 35.2 percent to $2.47 billion from $3.82 billion in the comparable 2014 period. The BSP said large drops in investments in debt instruments and reinvestments of earnings were the primary factors.
In June, net FDI totaled $383 million, down 30.9 percent from a year earlier. The first half result was $2.10 billion, 40.1 percent lower than in January-June 2014.
For the latest month, net inflows into equity capital totaled $152 million, up 45.3 percent. Placements in equity capital reached $173 million, exceeding withdrawals that amounted to $21 million.
Most of the equity capital investments originated from the Singapore, Hong Kong, the United States, Japan and the United Kingdom. The BSP said these were channeled mainly into financial and insurance, mining and quarrying, real estate, manufacturing, and wholesale and retail trade activities.
Reinvested earnings, meanwhile, rose by 31.7 percent to $79 million.
Intercompany borrowings or nonresidents’ placements in debt instruments issued by local affiliates dropped 20.7 percent to $227 million.
In the seven months to July, intercompany borrowings slumped by 51.6 percent to $1.20 billion. Cumulative reinvested earnings also declined 12.7 percent to $464 million.
Net equity capital placements, meanwhile, reached a cumulative $805 million as gross placements of $1.031 billion more than offset withdrawals of $225 million during the period. Year on year growth, however, was just 1 percent.
The central bank expects net FDI inflows of $6 billion this year.
Last year saw net FDI hit a record $6.2 billion, up 65.9 percent from a year earlier and topping the BSP’s $4.4-billion forecast.