Net FDI rises to 7-month high in May
NET foreign direct investment (FDI) inflows more than doubled in May from a year earlier and also hit a seven-month high, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
Net inflows for the month surged by 142.9 percent to $1.645 billion from $677 million last year with the bulk coming from intercompany loans, central bank data showed.
The result—up from April’s $1.027 billion and the highest since the P1.918 billion posted in October last year — brought the year-to-date tally to $4.847 billion, 49 percent higher compared the same period last year.
“This reflects continued investor confidence in the Philippine economy’s strong macroeconomic fundamentals and growth prospects,” the Bangko Sentral said in a statement.
Non-residents’ net placements in debt instruments issued by local affiliates or intercompany borrowings amounted to $1.329 billion in May, up 135.7 percent from a year ago.
The BSP noted a significant expansion in net equity capital inflows during the month, which rose to $241 million as placements of $257 million more than offset the $15 million in withdrawals.
“Equity capital placements were sourced primarily from Singapore, the United Kingdom, Germany, the United States and Japan,” it said.
Reinvestments of earnings also increased by 5.7 percent to $75 million in May from a year ago.
Net FDI inflows for January to May were driven largely by $3.129 billion in net investments in debt instruments, which were 17.3 percent higher reckoned from a year earlier.
Net investments in equity capital, meanwhile, surged to $1.375 billion from $242 million in the comparable 2017 period as gross placements of $1.514 billion more than compensated for withdrawals of $139 million.
Equity capital infusions during the period came mainly from Singapore, Hong Kong, China, Japan and the United States, 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 $343 million, the Bangko Sentral said.
The central bank expects FDI net 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.”
“FDI uptick is further seen in 2018 in line with the continued fast-tracking and modernization of the country’s soft and hard infrastructure, growing interest from non-traditional investment sources, and improved global perception of the Philippines as an investment destination,” it added.
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