Foreign direct investments in PH hit 16-month high in October 2017
MANILA, Philippines – The amount of foreign direct investments (FDIs) coming into the Philippines last October hit its highest level in 16 months, suggesting positive investor sentiment over the country's strong macroeconomic fundamentals and growth prospects.
Latest data from the Bangko Sentral ng Pilipinas (BSP) released on Wednesday, January 10, showed net FDI inflows reached $2.02 billion in October 2017, which was $1.35 billion higher than the $670 million in October 2016.
This was the biggest monthly inflow since April 2016, a period when the Philippines recorded $2.24 billion in FDIs. The April 2016 FDI was pumped by the P37-billion partnership deal between Bank of Tokyo-Mitsubishi UFJ and Security Bank Corporation.
Data showed equity placements jumped to $1.59 billion last October from $84 million in the same month in 2016, helping the local bourse reach a new record high.
BSP data showed that equity from the United States, Singapore, Kuwait, Germany, and Netherlands were placed in electricity, gas, steam and air-conditioning supply activities; manufacturing; construction; real estate; as well as wholesale and retail trade.
Meanwhile, withdrawals also surged to $66 million in October 2017, from $24 million in the same month in 2016. (READ: The real score on foreign investments in the time of Duterte)
Finance Secretary Carlos Dominguez III had said the $1.3-billion deal between Energy Development Corporation and the consortium of Macquarie Infrastructure and Real Assets and Arran Investment Private Limited as well as the $1-billion acquisition of Bulacan-based Mighty Corporation by Japan Tobacco would boost FDIs this year.
Net FDI inflow for the 1st 10 months of 2017 grew 20.5% to $7.86 billion, from $6.52 billion in the same period in 2016.
ING Bank Manila senior economist Joey Cuyegkeng said acquisition-related foreign investments generated $1.5 billion to $2 billion more in the 4th quarter of last year.
Cuyegkeng added that it helped the Philippine peso recover against the greenback, starting last October.
The local currency plunged to a new 11-year low of P51.77 against the US dollar last October 25, before closing strongly at P49:$1.
"The peso started to strengthen in October and continued to strengthen for the rest of the quarter also on the back of weak US dollar sentiment. Such inflows could again happen this year as foreign investors participate in a fast-growing economy," Cuyegkeng said.
For 2018, the BSP expects FDIs to reach $8.2 billion, from the projected $8 billion in 2017. – Rappler.com