FDI inflows up in Q1

Net inflow of foreign direct investments (FDIs) rose to $2.18 billion in the first three months as investors continued to show confidence on the Philippine economy, according to the Bangko Sentral ng Pilipinas (BSP).

According to latest data from the BSP, FDI net inflows in the first quarter accelerated by 43.5 percent to $2.18 billion from the $1.52 billion recorded in the same period last year.

“This reflected investors’ continued positive outlook on the Philippine economy on the back of sound macroeconomic fundamentals and robust growth prospects,” the BSP said.

The economy accelerated to 6.8 percent in the first quarter from the revised 6.5 percent in the fourth quarter of last year.

During the period, net equity capital investments rose more than sixfold to $887 million from last year’s level of $129 million. This happened as gross placements, amounting to $996 million, far outpaced withdrawals of $109 million.

Equity capital placements originated mainly from Singapore, Hong Kong, China, Japan, and Taiwan.

Placements were invested in manufacturing, financial and insurance, real estate, arts, entertainment and recreation, and electricity, gas, steam, and airconditioning supply activities.

Net investments in debt instruments in the first quarter declined 8.2 percent to $1.1 bil- lion as compared to the $1.19 billion posted in the previous year. Reinvestment of earnings was steady at $193 million.

For March alone, net inflow of FDIs reached $682 million, 27 percent up from $537 million last year.

The BSP said FDI inflows during the month rose as net equity capital increased to $318 million due to higher gross placements ($351 million), which outpaced withdrawals ($33 million).

Equity capital infusions during the month came mostly from Singapore, Hong Kong, Japan, the United States, and Sweden. These were channeled largely to manufacturing, real estate, art, entertainment and recreation, and financial and insurance activities.

Net inflow of debt instruments reached $301 million, 36.1 percent below last year, while reinvestment of earnings increased 12.6 percent to $63 million.

The Philippines posted record high FDI inflows for two consecutive years at $10.05 billion last year from $8.28 billion in 2016. The BSP expects FDIs to hit $8.2 billion this year.

Inflows from FDIs, remittances, exports, tourism receipts as well as business process outsourcing (BPO) sector help build up the country’s gross international reserves (GIR).