Net FDI Up 55% in November 2013

Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—Net foreign direct investment (FDI) inflows rose by 54.9 percent to $286 million in November 2013, up from $185 million in the same period a year ago. FDI inflows remained robust on the back of sustained investor confidence in the growth prospects of the economy.

The significant rise in net FDI during the month was bolstered by non-residents’ net placements in debt instruments issued by local affiliates, increasing by more than twofold to reach $225 million during the period from $108 million recorded in the previous year. Moreover, net equity capital inflows reached $7 million, a reversal of the $21 net equity capital outflow posted during the same period last year, as gross placements of $94 million more than offset withdrawals of $87 million in November 2013.

Gross equity capital placements—sourced mostly from the United States, Japan, the United Kingdom, Hong Kong, and Singapore—were channeled mainly to manufacturing; electricity, gas, steam and air-conditioning supply; real estate; mining and quarrying; and wholesale and retail trade activities. Meanwhile, reinvestment of earnings aggregated $55 million in November 2013.

On a cumulative basis, net FDI inflows for the first eleven months of 2013 likewise grew strongly, rising by 36.6 percent to reach $3.6 billion from $2.7 billion posted in the same period in 2012. In particular, non-residents’ net placements in debt instruments increased by more than fivefold to $2.3 billion, accounting for about two-thirds of FDI during the January-November 2013 period. This developed as parent companies abroad were encouraged by the sustained growth of the Philippine economy and thus continued to lend to their local subsidiaries/affiliates to fund existing operations and/or expansion of their businesses in the country. Moreover, gross placements of equity capital of $2.4 billion more than offset withdrawals of $1.7 billion. This resulted in net inflows of equity capital of $665 million during the period.

The bulk of gross equity capital placements—which originated primarily from Mexico, Japan, the United States, British Virgin Islands, and Singapore—were channeled mainly to manufacturing; water supply, sewerage, waste management and remediation; financial and insurance; real estate; and arts, entertainment and recreation activities. Meanwhile, reinvestment of earnings reached $641 million in January-November 2013.

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