FDI net inflows fall to $961M in April
Credit to Author: JORDEENE B. LAGARE| Date: Wed, 10 Jul 2019 16:28:08 +0000
NET inflows of foreign direct investments (FDI) posted a double-digit decline in April amid positive balances in the month, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.
In a statement, the central bank said the amount of investments made by foreign individuals or entities in the country dropped by 11.8 percent to $961 million in April from $1.1 billion in the same month a year ago.
“Equity capital placements emanated largely from Thailand, the United States, Singapore, Hong Kong and Japan,” it added.
These investments were channeled into the financial and insurance; real estate; manufacturing; electricity, gas, steam, and air-conditioning supply; and construction industries.
In contrast, non-residents’ investments in the country, consisting mostly of loans extended by parent companies abroad to their local affiliates, climbed by 12.6 percent to $830 million from $737 million a year earlier.
Also, reinvestment of earnings rose by 14 percent to $92 million from last year’s $80 million.
In an interview on Wednesday, BSP Governor Benjamin Diokno credited this particular increase to the country’s recent credit upgrade and easing inflation rate.
“Alam mo ‘yung (Have you looked at) foreign direct investments? I’ve looked at the data globally, it’s been declining. ’Yung sa atin (Here, it’s) increasing? That shows confidence. With the recent developments, baka tumaas pa (it might go up),” Diokno told repoters on the sidelines of the 2019 Awards Ceremony and Appreciation Lunch for BSP Stakeholders.
Investments, according to the BSP chief, also got a lift after survey company Social Weather Stations (SWS) reported that 80 percent of Filipinos were satisfied with the performance of President Rodrigo Duterte in the second quarter of 2019.
“That’s unusual on his third year. [Isn’t that] fantastic? We’re doing great,” Diokno said.
Year-to-date, net inflows dropped by 14 percent to $2.9 billion from $3.4 billion in from January to April 2018.
“This developed on account of the decline in net equity capital investments as placements dropped by 44.5 percent to $712 million from $1.3 billion, coupled with a 204.9-percent increase in withdrawals to $377 million from $124 million during the period,” the BSP explained.
Equity capital placements mostly came from the United States, China, Singapore and South Korea. These were invested in the financial and insurance; real estate; manufacturing; transportation and storage; and administrative and support service industries.
For the first four months of 2019, net investments in debt instruments reached $2.2 billion, up 16.3 percent from $1.9 billion last year.
Reinvestment of earnings in the period hit $326 million, 12.1 percent higher than 2018’s $291 million.
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