FDI Net Inflows for January-November 2014 Up by 62%

Manila—(PHStocks)—Bangko Sentral ng Pilipinas—Foreign direct investments (FDI) net inflows increased by 34.2 percent to $399 million in November 2014 from $297 million a year ago. This developed as net equity capital surged by more than 28 times to $201 million from $7 million recorded during the same period in 2013.

Specifically, the increase in net equity capital was buoyed by the 129.6 percent rise in equity capital placements coupled by the 83.6 percent decline in equity capital withdrawals. The bulk of equity capital investments was channeled to the financial and insurance sector; manufacturing; real estate; transportation and storage; and wholesale and retail trade activities.

Meanwhile, reinvestment of earnings and investments in debt instruments posted positive balances albeit lower than what were recorded during the same period a year ago. Specifically, investments in debt instruments contracted by 37.1 percent while reinvestment of earnings declined by 9.4 percent.

On a year-to-date basis (January to November 2014), net inflows of foreign direct investments amounted to $5.7 billion, increasing by 61.6 percent from its year-ago level of $3.5 billion. This reflected investors’ confidence in the Philippine economy on the back of sound macroeconomic fundamentals and strong growth prospects.

All FDI components posted increases during the 11-month period. In particular, the sustained lending by parent companies abroad to their local subsidiaries/affiliates to support existing operations and to fund the expansion of their businesses in the country resulted in the increase in investments in debt instruments by 46 percent to $3.4 billion from $2.3 billion. Moreover, net equity capital investments surged by 114.8 percent to $1.6 billion from $723 million, mainly on account of the contraction in equity capital withdrawals (by 71 percent) which more than offset the 15.6 percent decline in equity capital placements. Equity capital investments—which came mostly from the United States, Hong Kong, Singapore, Japan and Australia—were channeled mainly to the financial and insurance sector; manufacturing; real estate; wholesale and retail trade; and transportation and storage activities.