PH foreign direct investments hit $936M in Jan-Feb 2016

MANILA, Philippines – Despite the uncertainty of elections, foreign direct investments (FDIs) to the country increased at the start of year, according to the Bangko Sentral ng Pilipinas (BSP).

BSP data released on Tuesday, May 10, showed that FDIs grew by 50.6% to $936 million in the first two months of the year, up from $622 million for the first two months of last year.

The growth came amid increases in all FDI components, which the BSP attributed to investors' confidence in the country's economic growth prospects and sound macroeconomic fundamentals. 

Equity capital investments drove FDI net inflows during the period, rising by 119.1% to $449 million from $205 million last year.

The BSP said that was due to the increase in equity capital placements by 92.2% to $471 million which emanated largely from Hong Kong, Spain, the Bahamas, Taiwan, and Japan. Partly offsetting these placements were withdrawals of $22 million. 

Net investments in debt instruments or intercompany borrowings from foreign direct investors by their subsidiaries or affiliates in the Philippines registered an increase of 23% to $355 million.  Meanwhile, reinvestment of earnings reached $132 million during the two-month period. 

The economy grew by 5.9% last year with a particularly strong 4th quarter showing of 6.3%. The International Monetary Fund and the World Bank expect the Philippines to build on this growth for 2016.

January up, February down

Most of the growth was seen in January 2016 when FDI inflows totaled $537 million compared to $263 million in January 2015.

FDIs slowed in February with net FDI inflows amounting to $349 million, down by 2.9% from the $359 million recorded in the same period a year ago. 

The BSP attributed the decrease in February to lower investments in debt instruments which recorded lower net inflows of $98 million from $122 million a year ago. 

Meanwhile, equity capital investments expanded by 6.9% to $192 million as equity capital placements reached $211 million while withdrawals amounted to $19 million during the month.

Gross equity capital placements were sourced mostly from Spain, Japan, Hong Kong, the United States, and Germany. These infusions were mainly channeled to construction; manufacturing; real estate; accommodation and food service; and electricity, gas, steam, and air conditioning supply activities, the BSP said.

Reinvestment of earnings, meanwhile, grew by 2.6% to $59 million during the month. – Rappler.com