Net FDI flows surge to $2 billion in October

The central bank said it registered net foreign direct investments (FDI) inflows of $2.017 billion in October 2017, up 201.1 percent year-on-year or from $670 million on continued investor support.

“The upswing in FDI reflects continued investor confidence in the country’s strong macroeconomic fundamentals and growth prospects,” the Bangko Sentral ng Pilipinas (BSP) said yesterday.

On a cumulative basis, FDI net inflows for the first ten months of 2017 rose by 20.5 percent to $7.856 billion from $6.52 billion.

The BSP in a statement said that for the month of October alone, more than three-fourths of FDI net inflows were equity capital, with gross placements increasing by 1,788 percent to $1.595 billion from a mere $84 million same period in 2016.

A significant portion of the equity capital placements were channeled to electricity, gas, steam and air-conditioning supply activities, it added. “The other sectors that received investment inflows were manufacturing; construction; real estate; and wholesale and retail trade.”

The Netherlands, Singapore, Kuwait, the US and Germany remain the top sources of FDI in October 2017.

Investments in debt instruments or intercompany borrowings between foreign direct investors and their subsidiaries/affiliates in the Philippines however was lower by 22 percent year-on-year to $431 million. Reinvestment of earnings was unchanged at $57 million in October 2017.

For the January-October period, with net FDI inflows amounting to almost $8 billion, the net equity capital investments increased by 54.7 percent to $2.6 billion as gross equity capital placements of $3.1 billion more than offset withdrawals of $465 million, the BSP noted.

Gross equity capital placements came mostly from the Netherlands, the US, Singapore, Japan and Hong Kong, said the BSP. “By economic activity, equity capital investments were channeled mainly to electricity, gas, steam and air-conditioning supply, manufacturing; real estate; construction; and wholesale and retail trade activities.”

Non-residents’ net investments in debt instruments were up by 8.5 percent to $4.6 billion for the 10month period from $4.239 billion in 2016. Reinvestment of earnings, in the meantime, reached $662 million which was a modest increase from the previous year’s $605 million.