Investment inflows hit 6-month high in Feb
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 10 May 2019 16:27:07 +0000
NET foreign direct investment (FDI) inflows reached a six-month high in February, but failed to boost the year-to-date tally, which were lower than a year ago, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
In a statement, the central bank said net inflows rose by 20.2 percent to $746 million from $621 million in the same month last year, also an improvement from January’s $609 million and the highest since August 2018’s P756 million.
“Investment inflows continued as investors remain confident in the Philippine economy on the back of strong economic growth prospects and sound macroeconomic fundamentals,” it added.
February’s net FDI brought the year-to-date tally to $1.355 billion, 15.7 percent lower than last year’s.
Net equity capital investments contributed largely to the increase during the period, expanding by 141.7 percent to $233 million from $96 million in February 2018.
“This was due to the 126.3-percent increase in equity capital placements to $258 million that were sourced mainly from Japan, China, the United States, Singapore and Switzerland,” the Bangko Sentral explained.
Equity capital investments for the period were said to have channeled primarily to transportation and storage; financial and insurance; manufacturing; real estate; and professional, scientific and technical industries.
The BSP also noted that reinvestment of earnings grew by 13.7 percent to $79 million from $69 million in the same month a year ago.
Net investments in debt instruments — intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines — were the only negative item for the month, dropping by 4.5 percent to $435 million from a year ago.
The lower net FDI inflows for January to February, meanwhile, was blamed on the 67.1-percent decline in net equity capital investments, as placements decreased by 31.5 percent, while withdrawals grew by 236.5 percent.
Equity capital placements during the period came mostly from Japan, China, South Korea, Mauritius and the United States, and were mainly invested in financial and insurance, transportation and storage; real estate; administrative and support service; and manufacturing industries.
Intercompany borrowings increased by 12.9 percent to $1.012 billion from $896 million in the first two months of 2018.
Last, reinvested earnings grew by 10.1 percent to $155 million during the period.
The Bangko Sentral expects net FDI inflows to reach $10.2 billion this year.
In 2018, net FDI inflows hit a two-year low of $9.802 billion — short of the central bank’s $10.4-billion goal and the lowest since 2016’s $7.933 billion — down 4.4 percent from 2017’s $10.256 billion.
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