Year-to-Date FDI Level Reaches $1.4B

Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—Foreign direct investments (FDI) continued to register net inflows amounting to $350 million in February 2014. However, this was lower by 59 percent relative to the level recorded in the same period last year.

Equity capital investments likewise posted net inflows of $79 million during the month. This developed as gross equity capital placements of $110 million exceeded withdrawals amounting to $31 million in February 2014. The bulk of these equity capital investments—which emanated largely from the United States, Japan, Singapore, Germany and Hong Kong—were channeled mainly to financial and insurance activities; real estate; transportation and storage; manufacturing; and mining and quarrying activities.

Moreover, reinvestment of earnings rose by 11.3 percent year-on-year to $70 million during the month as foreign investors opted to retain their earnings in local corporations on the back of favorable prospects for the Philippine economy. Meanwhile, intercompany borrowings (or non-residents’ net placements in debt instruments issued by local affiliates) reached $201 million in February 2014. This resulted from sustained lending by parent companies abroad to their local subsidiaries/affiliates to support existing operations and to fund the expansion of their businesses in the country.

On a cumulative basis, FDI likewise continued to record net inflows amounting to $1.4 billion for the period January-February 2014, albeit lower by 24.7 percent than the level recorded during the same period last year. By FDI component, equity capital investments yielded net inflows of $357 million as gross equity capital placements of $472 million more than offset withdrawals of $114 million during the first two months of 2014. Gross equity capital placements during the period (sourced mainly from Hong Kong, the United States, Japan, Singapore and the United Kingdom) were channeled to financial and insurance activities; real estate; wholesale and retail trade; manufacturing; and transportation and storage activities. Meanwhile, other components of FDI such as reinvestment of earnings and investment in debt instruments also registered net inflows amounting to $131 million and $888 million, respectively, during the January-February 2014 period.

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