As PH posts strong growth, foreign investments surge in Jan-Nov
MANILA, Philippines – Foreigners are pouring more money into their businesses in the Philippines on the back of the economy's sustained growth.
The Bangko Sentral ng Pilipinas (BSP) reported Monday, February 10 that foreign direct investments registered net inflows of $3.6 billion in January to November 2013, up 36.6% from $2.7 billion in the same period of 2012.
In November alone, FDI inflows surged 54.9% to $286 million from $185 million the previous year.
A sign of investor confidence, FDIs refer to capital foreigners invest to set up new or expand existing businesses in the country.
Unlike "hot money" or portfolio investments, which go to stocks and bonds and fly in and out of financial markets easily, FDIs are for the long term and they help spur job creation.
Foreign investments in debt instruments issued by local companies grew more than fivefold to $2.3 billion, accounting for about two-thirds of FDI for the first 11 months of 2013.
"Parent companies abroad were encouraged by the sustained growth of the Philippine economy and thus continued to lend to their local subsidiaries/affiliates to fund existing operations and/or expansion of their businesses in the country," said BSP in a statement.
Equity capital investments of $2.4 billion also offset withdrawals of $1.7 billion, resulting in net inflows of $665 million.
Bulk of the equity capital placements came from Mexico, Japan, US, British Virgin Islands and Singapore. These were channeled mainly to manufacturing; water supply, sewerage, waste management and remediation; financial and insurance; real estate; arts, entertainment and recreation activities.
The Philippines grew by 7.2% in 2013, beating market and government expectations, despite a string of disasters, including Yolanda (Haiyan), the world's deadliest typhoon.
Socioeconomic planning chief Arsenio Balisacan said growth was fueled by the services sector, particularly trade, real estate and renting, as well as the robust performance of the manufacturing sector.
On the demand side, sustained consumer and government spending, and higher investments were key drivers. – Rappler.com