Foreign direct investments more than double in Sept

MANILA, Philippines - Foreign direct investments (FDI) surged 116 percent in September, reflecting continued investor confidence in the country’s strong economic growth and sound fundamentals, the Bangko Sentral ng Pilipinas said yesterday.

“Increases were posted in all FDI components. The sustained increase in net inflows during the month reflects the continued investor confidence in the country’s solid macroeconomic fundamentals,” the BSP said.

The BSP said FDI amounted to $680 million in September, more than double the $314 million recorded in the same month last year.

For the first nine months of the year, FDI inflows reached $4.88 billion, surpassing the BSP’s target of $4.44 billion for the entire 2014.

Equity capital or investments made by foreign firms in their Philippine units jumped to $161 million from only $7 million last year.

The BSP said the bulk of the equity capital placements came from the US, Singapore, Taiwan, Japan, and Germany and were put into manufacturing, real estate, wholesale and retail trade, financial and insurance, and transportation and storage sectors.

Reinvested earnings also increased by 41 percent to $61 million in September from $43 million in the same month last year, while placements in debt instruments or borrowings of local subsidiaries from their parent companies rose 74 percent to $458 million from $263 million.

“The significant rise in FDI during the period was driven by the sustained growth in investments in debt instruments… This developed as a result of higher lending of parent companies abroad to their local affiliates to fund existing operations and business expansion plans in the country,” the BSP said.

Placements in debt instruments during the nine-month period went up by 55 percent to $3.087 billion from $1.999 billion last year, while reinvested earnings climbed 70 percent to $650 million from $382 million.

Equity capital placements during the period also went up 77 percent to $1.139 billion from $643 million a year ago, the BSP said.

The central bank said these placements mainly came from the US, Hong Kong, Japan, Singapore, and Taiwan. These funds went into financial and insurance, manufacturing, real estate, wholesale and retail trade, and transportation and storage sectors.