FDI down 45.3% in January

MANILA, Philippines – The country’s foreign direct investments contracted 45.3% in January 2013, according to data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday, April 10. 

The country only received US$576 million in January 2013, lower than the $1.1 billion in January 2012. This was two months before the Philippines received its first investment grade rating from Fitch Ratings. 

Bulk of the investments in January was accounted for by the cash payment of Mexico-based Coca-Cola FEMSA S.A.B. de C.V. for the $688.5 million purchase of a 51% stake in Coca-Cola’s Philippines bottling operations. This transaction marked the transfer of control of Coca-Cola Bottlers Philippines Inc. (CCBPI) to FEMSA from the Atlanta-based parent firm Coca-Cola Company. 

“The bulk of these equity capital investments — which originated mostly from Mexico, Malaysia, the Netherlands, the United States, and Japan — were channeled to the manufacturing, financial and insurance activities, and real estate sectors,” BSP said in a statement. 

The BSP said equity and investment fund shares contracted 71.6% to $247 million in January 2013 from $869 million in 2012.

BSP data also showed that equity other than reinvestment earnings contracted 79.1% to $162 million in January 2013 from $775 million in 2012. 

This was composed of gross capital placements worth $873 million and equity capital withdrawals worth $711 million in January 2013. Placements increased 9.5% from $797 million while withdrawals surged 3,131.8% from $22 million in January 2012.

BSP said reinvestment of earnings declined 9.6% to $162 million in January 2013 from $775 million in 2012.

“This developed as a large part of the equity capital infusion in January only involved a transfer of ownership of shares in a local manufacturing company from one non-resident to another non-resident investor, resulting in offsetting entries recorded in placements and withdrawals of equity capital,” it added. – Rappler.com