Job-generating FDIs more than double in July
MANILA, Philippines — Foreign direct investments inflows more than doubled in July, supported by strong investor optimism towards the Philippines, the Bangko Sentral ng Pilipinas reported Wednesday.
Net FDI inflows spiked to $914 million in July, up nearly triple the $344 million posted in the same month in 2017.
For the first seven months of the year, FDI inflows jumped 52.1 percent to $6.7 billion, still below the BSP’s $9.2 billion full-year forecast for 2018.
According to the BSP, the bulk of the FDIs for the month were in the form of intercompany borrowings between foreign direct investors and their subsidiaries in the Philippines, which grew to $584 million against $136 million in the same period last year.
Meanwhile, new FDIs that entered in the country in July hit $261 million from $137 million year-on-year, on the back of 60.6 percent increase in equity capital placements and a 52.3 percent decline in investments that headed for the exit.
Top sources of investment
Investors from Singapore, Taiwan, the United States, Korea and Japan were the biggest sources of fresh capital in April, the BSP said. Funds went to manufacturing; financial and insurance; real estate; wholesale and retail trade; and administrative and support service activities.
“This reflected the continued positive investor sentiment on the Philippine economy on the back of strong macroeconomic fundamentals and growth prospects,” the central bank said in a statement.
Job-generating FDIs are a key source of capital for the country’s economy as they provide opportunities for business expansion.
Officials want to attract more FDIs, not only keep existing ones, as they tend to stay longer than “hot money” that come and go with ease.
In June, London-based Capital Economics warned that President Rodrigo Duterte’s erratic and crass leadership style could put off investors, adding that poor leadership and political uncertainty could derail the country’s economic growth momentum.
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