Foreign direct investments surge
MANILA, Philippines - Net foreign direct investments surged nearly 80 percent to $476 million in March from $266 million in the same period last year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
Despite the increase in March, the first quarter tally of $1.852 billion was 12 percent lower than the $2.096 billion in net inflows a year ago.
The central bank said equity capital or investments made by foreign companies in their Philippine units increased by more than seven-fold to $278 million in March from $38 million in the same period a year ago.
The central bank said the bulk of these investments came from the United States, Japan, Singapore, Hong Kong, and Taiwan.
These inflows mainly went to financial and insurance activities, manufacturing, real estate, mining and quarrying, and wholesale and retail trade, the BSP added.
Inter-company borrowings or placements of parent firms in debt instruments issued by their local affiliates, meanwhile, dropped 19 percent to $143 million in March from $176 million in the same month last year.
But the BSP said this showed “continued lending of parent companies abroad to their local affiliates to fund existing operations and the expansion of their businesses in the country.â€
“This is an indication of sustained confidence in the country’s strong macroeconomic fundamentals,†the BSP said.
Reinvestment of earnings in March also climbed four percent to $54 million, as foreign investors “opted†to keep their earnings in local units due to rosy prospects for the economy.
Placements in debt instruments fell three percent to $1.031 billion, while reinvestment of earnings dropped seven percent to $185 million.
Equity capital investments also went down 23 percent to $636 million, and these were mainly put into financial and insurance activities, real estate, manufacturing, wholesale and retail trade, and mining and quarrying activities.
The bulk of the equity capital during the period came from United States, Hong Kong, Japan, Singapore, and Taiwan.
The central bank expects net FDI of $2.6 billion this year. Net FDI last year totalled $3.9 billion, exceeding the central bank’s forecast of $2.1 billion.
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