Philippines starts 2018 with foreign direct investments up by over 50%
MANILA, Philippines – After surpassing expectations in 2017, strong foreign direct investment (FDI) inflows into the country continued at the beginning of 2018, according to the Bangko Sentral ng Pilipinas (BSP).
Preliminary data released by the BSP on Tuesday, April 10, showed that FDI flows totaled $919 million in January 2018, up by 56.7% from the $587 million recorded in the same month in 2017.
Net equity capital inflows accounted for the bulk of FDIs during the month, rising more than 8 times to $473 million from $58 million.
This was driven by a sevenfold increase in equity capital placements to $531 million, with withdrawals totaling $58 million.
The BSP noted that the placements were sourced mainly from Singapore, China, Taiwan, Japan, and the United States. They were channeled into manufacturing; financial and insurance; real estate; electricity, gas, steam, and air-conditioning supply; and wholesale and retail trade activities.
Meanwhile, net investments in debt instruments issued by local affiliates, mainly as intercompany loans, declined by 16.7% to $381 million. Reinvestment of earnings also fell by 8.4% to $65 million during the month.
FDI inflows hit a new all-time high of $10.05 billion in 2017, up by 21.4% compared to 2016 levels and comfortably above the $8-billion central bank target.
For this year, the BSP has set a target of $8.2 billion in FDI flows, with BSP Governor Nestor Espenilla Jr noting a bullish outlook on achieving it given the strong start.
"We're certainly hopeful because there are many drivers for more FDI. Among other things, the growth momentum is strong, we are opening new relationships across borders beyond ASEAN (Association of Southeast Asian Nations) and Greater Asia, so we have more expectations of increased FDI," he said in a statement.
"We have demand for it and we have the Build, Build, Build program and that's creating also private sector demand to support the program. From an investment standpoint, it makes sense to look at the Philippines as an investment destination," he added. – Rappler.com