FDI inflows surge 141% in September

Foreign direct investments (FDI) surged 141 percent in September as invrestors were drawn in by of the country’s favorable macroeconomic fundamentals, the central bank said in a statement.

Net FDI inflows jumped to $319 million in September from $132 million in the same month last year, the Bangko Sentral ng Pilipinas (BSP) said.

“The significant rise in foreign investments into the country reflects favorable investor outlook on the Philippine economy on the back of sound macroeconomic fundamentals amid challenging global economic conditions,” the BSP said.

The Philippine economy has already grown 7.4 percent in the nine months to September, outpacing the government’s full-year target of six to seven percent.

BSP data showed net equity capital plunged 88 percent to $7 million in September from $57 million last year, while reinvested earnings fell 32 percent to $44 million from $65 million.

Placements in debt instruments or borrowings made by local subsidiaries from their parent firms, meanwhile, ballooned to $267 million from $10 million a year ago.

Gross equity placements during the month mostly came from the United States, United Kingdom, Japan, the Netherlands, and Hong Kong. These went into financial and insurance, real estate, manufacturing, mining and quarrying, and professional, scientific and technical activities.

In the nine months to September, net FDI inflows amounted to $3.108 billion, 33 percent above the $2.332 billion recorded in the same period last year.

Net equity capital placements went down 52 percent to $589 million from $1.216 billion, while reinvested earnings slid 32 percent to $32.2 million from $53.6 million.

Placements in debt instruments, meanwhile, surged 504 percent to $1.982 billion from $382 million.

“Parent companies abroad continued to lend to their local subsidiaries/affiliates to fund existing operations and/or the expansion of their businesses in the country,” the central bank noted.

Most of the equity placements came from Mexico, Japan, the United States, British Virgin Islands, and the United Kingdom.