Q1 FDI net inflows down 8.4% to $1.3 billion


The Bangko Sentral ng Pilipinas (BSP) on Monday announced that foreign direct investments (FDI) recorded $1.3-billion net inflows in the first quarter of the year.

In a statement, the BSP said that level in the first three months of the year was lower by 8.5 percent than the $1.4 billion recorded in the same period last year.

“The decline in cumulative FDI was due mainly to lower net equity capital investments in the first quarter of the year,” it stated.

By FDI component, gross equity capital placements aggregated $1.5 billion, 49.4 percent higher than its year-ago level of $1 billion.

The central bank added that the said equity capital investments came from Mexico, Japan, Malaysia and United States.

It added that the FDIs were channeled to manufacturing; water supply, sewerage, waste management and remediation activities; financial and insurance activities; arts; entertainment and recreation and real estate.

The BSP said that these placements were partly offset by the $799-million withdrawals of investments, resulting in $729-million net infusion of equity capital during the first quarter of the year.

It continued that reinvestment of earnings reached $196 million in the first quarter of 2013, as foreign investors opted to hold their earnings in local corporations because of favorable domestic economic prospects

Nonresidents’ net placements in debt instruments issued by local affiliates (or intercompany borrowings between foreign direct investors and their subsidiaries/affiliates in the Philippines in the form of loans and debt securities) totaled $378 million in January to March 2013.

The central bank added that this level was higher by 71 percent than the $221-million intercompany borrowings recorded in the same period last year.

“Parent companies abroad continue to lend funds to their local subsidiaries/affiliates to sustain existing operations or expand their businesses in the country,” it said.

Meanwhile, the BSP said that FDI recorded net outflows of $78 million in March this year. It was a reversal of $179-million net inflows recorded in the same month last year.

It added that equity capital investments yielded net outflows of $17 million because of the combined effects of lower equity capital placements and higher withdrawals.

Also, the central bank said that investments in debt instruments registered net outflows of $112 million largely on account of remittance of profits by local branches of foreign banks to their offices abroad.

“These developments more than offset the net inflows recorded in the reinvestment of earnings account amounting to $51 million,” it stated.


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