FDI inflows hit $6.2B in first 10 months of 2016

MANILA, Philippines – Foreign direct investments (FDIs) hit net inflows in October 2016 as investor confidence in the country's macroeconomic fundamentals continued to push investment comfortably above 2015 levels.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday, January 10, showed that FDI net inflows reached $6.2 billion in the first 10 months of 2016, a 22.2% jump from the $5.1-billion net inflows posted in the same period in 2015.

The central bank noted that nearly two-thirds of FDI net inflows were in the form of debt instruments by local affiliates, or intercompany borrowings, which increased by 34.9% to $3.9 billion from $2.9 billion in 2015.

Net equity capital, meanwhile, accounted for 27% of FDI net inflows during the period, representing growth of 9.3% to $1.7 billion.

The bulk of the gross equity capital investments came largely from Japan, Singapore, the United States, Hong Kong, and Taiwan. They were channeled mainly into real estate; manufacturing; wholesale and retail trade; utilities; and human health and social work.

Reinvestment of earnings, meanwhile, declined by 5.2% from January to October 2016 to $605 million from the $637 million in the previous period in 2015.

October dip

For October 2016 alone, FDI hit net inflows of $342 million which the BSP attributed to continued investor confidence in the economy. That period last year saw fiery remarks by President Rodrigo Duterte against the US and EU.

Despite the net inflows, however, October's total is down 14.3% compared to the $399-million net inflows posted during the same month in 2015.

Net availment of debt instruments amounted to $225 million, lower by 20.3% compared to the $282 million recorded in October 2015.

Net equity capital investments, meanwhile, increased by 10.2% to $60 million as gross equity capital placements of $84 million exceeded withdrawals of $24 million.

These placements came mainly from Germany, Taiwan, the US, the Netherlands, and Cayman Islands. They were channeled into financial and insurance; manufacturing; real estate; construction; and hotel and food service activities.

Reinvestment of earnings totaled $57 million during the month. – Rappler.com