Net FDI inflows reach $1.5 billion in February

The country’s foreign direct investments (FDI) net inflows increased by 52.6 percent year-on-year to $1.49 billion as of end-February on the back of continued investor confidence in the Philippine growth path.

FDI covers actual investment inflows such as equity capital, reinvestment of earnings, and borrowings between affiliates.

The Bangko Sentral ng Pilipinas (BSP) said the sustained investment inflows "reflect investor confidence in the country’s sound macroeconomic fundamentals and growth prospects.”

In the first two months, data show net investments in debt instruments went up by 10 percent to $793 million from $722 million while net equity capital reported a more significant increase of 375 percent to $569 million.

Investors from Singapore, China, Hong Kong, Taiwan, and Japan were the main source of equity capital placements during the period, and these funds went to these sectors: manufacturing; financial and insurance; real estate; art, entertainment and recreation; and electricity, gas, steam and air-conditioning supply activities.

Reinvestment of earnings as of endFebruary reached $130 million, down 5.2 percent from same time in 2017 of $137 million.

For the month of February alone, the BSP registered $573 million net inflows, up 46.4 percent year-on-year from $392 million.

The BSP attributed the increase to the 56.3 percent growth in investments in debt instruments or intercompany borrowings between foreign direct investors and their subsidiaries/affiliates in the Philippines. Borrowings between affiliates amounted to $412 million.

For the month of February, net equity capital rose by 55.4 percent to $96 million, as gross placements of $114 million more than compensated for the withdrawals of $18 million, according to the central bank.

Equity capital placements were sent by investors based in Hong Kong, the US, China, the Netherlands, and Japan, and were invested in the following sectors: art, entertainment and recreation; real estate; manufacturing; construction; and electricity, gas, steam and airconditioning supply activities.

As for reinvestment of earnings, these fell 1.7 percent to $65 million in February.