FDIs surge 50% to $4 B in 7 months

MANILA, Philippines - Foreign direct investments surged by more than 50 percent in the first seven months of the year amid the country’s strong macroeconomic fundamentals, the Bangko Sentral ng Pilipinas reported yesterday.

Net FDI inflows amounted to $4.008 billion as of July, up 56.1 percent from $2.568 billion in the same period last year.

“This reflected continued favorable investor sentiment on the Philippine economy on the back of the country’s strong macroeconomic fundamentals,” the central bank said.

Equity capital or investments made by foreign companies in their Philippine units went up 46 percent to $866 million from $593 million.

The central bank said most of the investments during the period came from the United States, Hong Kong, Japan, Singapore, and Taiwan. These funds went into financial and insurance, real estate, manufacturing, wholesale and retail trade, and transportation and storage activities.

Reinvestment of earnings also climbed 61 percent to $458 million in the seven months to July from $284 million a year ago, while inter-company borrowings grew 58.8 percent to $2.684 billion from $1.69 billion.

“This developed as parent companies abroad continued to lend funds to their local subsidiaries/affiliates to sustain existing operations and expand their businesses in the country,” the BSP said.

For July alone, net FDI inflows amounted to $436 million, down by 20.6 percent from $549 million a year ago.

Equity capital investments grew by more than 10-fold to $104 million from $10 million, while reinvestment of earnings went up 11.5 percent to $58 million from $52 million. However, inter-company borrowings declined by 43.8 percent to $274 million from $487 million.

Last year, net FDI inflows increased 20 percent to $3.86 billion, surpassing the central bank’s $2.1-billion target for 2013. The BSP expects net FDI inflows to reach $1 billion this year.