PH ends 2016 with foreign direct investments up 40.7%

MANILA, Philippines – Foreign direct investments (FDIs) continued their resurgence despite a leadership change halfway into last year, according to the Bangko Sentral ng Pilipinas (BSP).

Preliminary data released by the BSP on Friday, March 10, showed that full year-2016 FDIs totaled $7.9 billion, a 40.7% jump from what was seen in 2015.  It also surpassed the BSP’s official forecast of $6.7 billion.

The jump came as most FDI components continued to register net inflows, which the central bank attributed to strong investor confidence in the country’s solid macroeconomic fundamentals.

Net investments in debt instruments or intercompany borrowings from foreign direct investors by their subsidiaries or affiliates in the Philippines led the charge, rising by 68.6% to $5.2 billion from $3.1 billion in 2015.

Equity capital investments also posted net inflows of $2 billion, 12.1% higher than the $1.8 billion recorded in 2015, as placements of $2.7 billion outweighed withdrawals of $643 million.

These equity investments originated mainly from Japan, Hong Kong, Singapore, the United States, and Taiwan. They were channeled largely to financial and insurance, arts, entertainment and recreation, manufacturing, real estate, and construction activities.

Reinvestment of earnings, meanwhile, declined by 4.9% to $710 million during the year.

December flows

For the month of December alone, FDIs totaled $669 million – more than double the $272 million recorded in the same month in 2015.

More than half of these investments, or $415 million, came from net placements in debt instruments issued by resident affiliates.

Net equity capital investments, meanwhile, hit $206 million, as equity capital placements of $294 million offset the $88 million in withdrawals. 

These equity capital placements came mostly from Hong Kong, Japan, the US, Singapore, and Belgium. They were channeled mainly to arts, entertainment and recreation, financial and insurance, manufacturing, real estate, and professional, scientific, and technical activities.

Reinvestment of earnings also contributed $47 million to inflows for the month. – Rappler.com