FDI Up 20% to $3.9B in 2013

Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—Net foreign direct investment (FDI) inflows in 2013 rose to $3.9 billion from $3.2 billion in 2012. The 20 percent increase in FDI during the year was buoyed by investors’ confidence on the country’s sound macroeconomic fundamentals. Net inflows were registered across all components of FDI.

In particular, non-residents’ net placements in debt instruments issued by local affiliates increased by more than sixfold to $2.5 billion, accounting for more than half of the FDI in 2013.  This developed as parent companies abroad continued to lend to their local affiliates to fund existing operations and expansion of their businesses in the country.

Moreover, gross placements of equity capital of $2.5 billion more than offset withdrawals of $1.8 billion.  As a result, net inflows of equity capital amounted to $664 million during the period.  The bulk of gross equity capital placements—which originated primarily from Mexico, Japan, the United States, British Virgin Islands, and Singapore—were channeled mainly to manufacturing; water supply, sewerage, waste management and remediation; financial and insurance; real estate; and mining and quarrying. Meanwhile, reinvestment of earnings reached $701 million in 2013.

On a monthly basis, net FDI inflows amounted to $180 million in December 2013.  However, this was lower by 18.5 percent than the $221 million recorded in the same period a year ago.  Equity capital investments during the month recorded a net outflow of $60 million, a reversal of the $210 million net equity capital inflows posted in the same month a year ago.  This came about as withdrawals of $96 million offset the placements of  $36 million.

Gross equity capital placements—sourced mostly from the United States, Singapore, Hong Kong, the United Kingdom and Singapore—were channeled mainly to real estate; mining and quarrying; financial and insurance; administrative and support service and manufacturing activities.  Meanwhile, non-residents’ net placements in debt instruments issued by local affiliates, consisting mainly of intercompany loans, rose significantly to reach $182 million, reversing the $51 million net repayments registered in the same period a year ago.  Reinvestment of earnings reached $57 million in December 2013.

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