FDI posts $919-M net inflows in January – BSP

Published April 10, 2018, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

The central bank registered $919-million worth of foreign direct investments (FDI) net inflows in January, up 56.7 percent year-on-year.

“Investor outlook on the country’s economic performance remained positive on the back of strong macroeconomic fundamentals,” the Bangko Sentral ng Pilipinas (BSP) noted in a statement yesterday.

BSP Governor Nestor A. Espenilla Jr., asked for his comments, said the 2018 FDI outlook is equally optimistic as in 2017 which hit a record-high.

“We are certainly hopeful,” he said. “There are more drivers for more FDIs. We are opening crossborder new relations in ASEAN and Greater Asia, so (there will be) more FDIs.”

Espenilla said the increased government spending on infrastructure, which will spur the same investment funding from the private sector, will create FDI demand.

“We certainly have more demand for it (infrastructure) and (it is) also creating private sector demand. From an investments standpoint, it makes sense to look at the Philippines as an investment destination. We have very optimistic outlook on FDI,” he added.

Based on the central bank statement, in January the net equity capital inflows, which it said accounted for the “bulk of FDI during the period” significantly rose by 717 percent from $58 million same time last year to $473 million.

“This was driven by the sevenfold increase in equity capital placements to $531 million, while withdrawals amounted to only $58 million during the month,” said the BSP.

Equity capital placements were sourced largely from Singapore, China, Taiwan, Japan, and the United States.

“These capital infusions were invested mainly in manufacturing; financial and insurance; real estate; electricity, gas, steam and air-conditioning supply; and wholesale and retail trade activities,” said the BSP.

In January, net investments in debt instruments issued by local affiliates, consisting of intercompany loans, dropped by 16.7 percent to $381 million. Reinvestment of earnings also decreased moderately by 8.4 percent to $65 million during the period, said the BSP.

In 2017, the BSP registered a record-breaking $10 billion FDI net inflows, up 21.4 percent year-on-year. The full-year FDI flows exceeded the BSP’s $8 billion estimates for the year.