Foreign direct investments (FDI) rose significantly in July 2018 to $914 million from the $344 million posted in July 2017. This reflected the continued positive investor sentiment on the Philippine economy on the back of strong macroeconomic fundamentals and growth prospects, according to the Bangko Sentral ng Pilipinas (BSP).
More than 60% of FDI net inflows during the month were in the form of non-residents’ investments in debt instruments issued by local affiliates (intercompany borrowings), which expanded to $584 million from $136 million in the same period last year. Net equity capital investments grew by 90.2% to reach $261 million from $137 million in 2017. This was on account of the 60.6% increase in equity capital placements to $278 million coupled with the decline in withdrawals by 52.3 percent to $17 million.
Equity capital placements were sourced primarily from Singapore, Taiwan, the United States, Korea and Japan. Investments were channeled largely to manufacturing; financial and insurance; real estate; wholesale and retail trade; and administrative and support service activities. Reinvestment of earnings amounted to $69 million during the month.
For the first seven months of 2018, FDI net inflows increased by 52.1% to $6.7 billion from $4.4 billion last year. This was mainly on account of the expansion in net equity capital investments by more than five times to $1.8 billion from $338 million last year. Gross equity capital placements grew by almost thrice to $2 billion, while withdrawals declined to $180 million. Equity capital placements during the period came mainly from Singapore, Hong Kong, Japan, the United States and China.
Investments were infused mostly in manufacturing; financial and insurance; real estate; arts, entertainment and recreation; and electricity, gas, steam and air-conditioning supply activities. Investment in debt instruments expanded by 21.8% to $4.3 billion from $3.6 billion last year. Meanwhile, reinvestment of earnings slightly rose to $489 million during the period.