FDI Up 59% in March 2016, 1Q2016 Level Reaches $1.3B

Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—Foreign direct investments (FDI) rose by 59.1 percent to post $364 million (PSE: BPI) net inflows in March 2016 from $229 million in the comparable period in the previous year. The country’s sustained favorable economic performance as evidenced by 69 consecutive quarters of positive growth, and growth prospects for the year ahead, helped drive inflows in all FDI components during the period.

Non-residents’ investments in debt instruments (consisting mainly of loans extended by parent companies abroad to their local affiliates) accounted largely for the increase in net FDI in March. In particular, net investments in debt instruments more than doubled to $262 million from $122 million last year. Likewise, net equity capital placements grew by 6.9 percent to $53 million from $50 million. This resulted as gross equity capital placements went up to $135 million, more than offsetting withdrawals of $82 million.

Equity capital placements during the month came mostly from Singapore, the United States, Hong Kong, Japan, and Taiwan. These placements were channeled to accommodation and food service; real estate; manufacturing; financial and insurance; and wholesale and retail trade activities. Meanwhile, reinvestment of earnings declined by 14.3 percent to $49 million during the period.

On a cumulative basis, FDI yielded $1.3 billion net inflows in the first quarter of 2016, increasing by 52.1 percent from US$850 million in same period last year. This was on account of higher gross equity capital placements at $599 million during the period from the previous year’s level of $330 million. Equity capital infusions during the period emanated largely from Hong Kong, Singapore, Spain, the Bahamas, and Taiwan. By economic activity, equity capital were mainly channeled to financial and insurance; construction; accommodation and food service; real estate; and manufacturing activities. Net investments in debt instruments increased by 50.1 percent to US$617 million from US$411 million in the same quarter in 2015. Meanwhile, reinvestment of earnings contracted moderately by 2.1 percent to $181 million.

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