Net FDI inflows drop 29% in Sept

Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 11 Dec 2018 16:22:53 +0000

Net foreign direct investments (FDI) dropped to their lowest level in six months in September, data from the Bangko Sentral ng Pilipinas (BSP) showed.

At $569 million, the net inflow was 29.4 percent lower compared to a year earlier and was also the smallest since the P675 million posted in March this year.

It brought the year-to-date tally to $8.038 billion, 24.2 percent higher compared to the same period last year.

“This developed as equity capital withdrawals of $187 million exceeded equity capital placements amounting to $69 million,” the Bangko Sentral said of September’s slump.

“During the period, equity capital infusions originated largely from the United States, Japan, Macau, Hong Kong and China,” it added.

The bulk of net FDl inflows came in the form of net placements in debt instruments, which rose by 24.3 percent from a year ago to $609 million.

Reinvestments of earnings, meanwhile, increased by 32.8 percent to $78 million from a year ago.

Net FDI inflows for January to September, meanwhile, were driven largely by $5.524 billion in net investments in debt instruments, which were 19.6 percent higher reckoned from a year earlier.

“Investment inflows continued, buoyed by investor confidence in the Philippine economy on the back of strong macroeconomic fundamentals and high growth prospects,” the Bangko Sentral said.

Net investments in equity capital rose to $1.9 billion from $1.249 billion in the comparable 2017 period as gross placements of $2.282 billion more than compensated for withdrawals of $382 million.

Equity capital infusions during the period came mainly from Singapore, Singapore, Hong Kong, the United States, Japan and China, and were invested in manufacturing, financial and insurance, real estate, arts, entertainment and recreation, and electricity, gas, steam and air-conditioning supply activities.

Reinvestments of earnings were also higher at $614 million, the BSP said.

The central bank expects net FDI inflows to reach $9.2 billion this year, which it said would be “driven primarily by the sustained positive developments in the domestic economy, expected improvement in global economic conditions relative to 2017 as well as the implementation of public-private partnership projects that were approved/awarded in the previous years, when most projects started.”

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