Foreign direct investments in PH up 7% in July

BALANCING OUT. Foreign investments in debt instruments grew by almost 80% in July, helping to balance out a slowing of net equity placements, which while still positive was down by 85.5% for the month. File photo/AFP

BALANCING OUT. Foreign investments in debt instruments grew by almost 80% in July, helping to balance out a slowing of net equity placements, which while still positive was down by 85.5% for the month.

File photo/AFP

MANILA, Philippines – Foreign direct investments (FDIs) in the country picked up last July after being down for two straight months.

FDIs posted net inflows of $503 million in July, 7% higher than the year-ago level of $470 million, said the Bangko Sentral ng Pilipinas (BSP) on Monday, October 10.

The net inflow was mainly due to investments in debt instruments, or inter-company borrowings, which grew by 79.4% to hit $417 million from the $232 million recorded in the same period last year. 

In contrast, the BSP noted that equity capital registered net inflows of $23 million during the month, down by 85.5% compared to the same period last year. Gross equity capital placements were sourced mainly from Germany, the United States, Singapore, Japan, and Korea. (READ: Duterte's tough talk and what it could mean for US, EU investments)

These inflows were channeled largely into real estate; wholesale and retail trade; manufacturing; financial and insurance; and construction activities, the BSP said.

The central bank also reported that reinvestment of earnings declined by 19.5%, totaling $63 million for July.

FDI up in 2016

July's result also means FDI net inflows into the country has reached $4.7 billion so far this year, up by 79.1% from last year.

The bulk of the net inflows in 2016 were in the form of debt instruments which amounted to $2.8 billion, more than twice the $1.3 billion recorded in the same period last year.

Equity capital, on the other hand, posted net inflows of $1.5 billion, 74.7% higher than the $841 million recorded last year, as placements of $1.7 billion more than offset withdrawals of $189 million.

These equity capital placements came primarily from Japan, Singapore, Hong Kong, the US, and Taiwan, and were channeled to financial and insurance; real estate; manufacturing; construction; and accommodation and food service activities.

Reinvestment of earnings, meanwhile, amounted to $446 million so far this year. – Rappler.com