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Philippines: FDI inflows rise 24% in 4 months
MANILA, Philippines — Foreign direct investments (FDI) continued to flow into the country, growing 24 percent in the first four months of the year amid favorable investor sentiment on the back of sound macroeconomic fundamentals and growth prospects.
The Bangko Sentral ng Pilipinas (BSP) said FDI inflows amounted to $3.2 billion from January to April this year, $625 million higher than the $2.57 billion inflows in the same period last year.
“FDI inflows were boosted by continued favorable investor sentiment on the back of the country’s solid macroeconomic fundamentals and growth prospects,” the central bank said in a statement.
In particular, equity placements surged 341 percent to $1.26 billion in the first four months from $258 million recorded in the same period last year.
Fresh capital from Singapore, Hong Kong, China, Japan and the US were infused primarily into manufacturing, financial and insurance, arts, entertainment and recreation, real estate, and electricity, gas, steam and air-conditioning supply activities.
On the other hand, withdrawals rose 43.4 percent to $124 million from $86 million.
Net investments in debt instruments or lending by parent firms abroad to their local affiliates declined 14.5 percent to $1.8 billion from $2.1 billion.
Likewise, reinvestment of earnings slipped 2.1 percent to $268 million from $274 million.
For the month of April alone, the BSP said FDI inflows declined 3.2 percent to $1.03 billion from $1.06 billion in the same period last year.
The BSP has revised upward its FDI inflow projection to $9.2 billion instead of $8.2 billion this year amid the anticipated higher net inflow and lower net outflow in the other investments account.
The central bank said the higher projection would be “driven primarily by the sustained positive developments in the domestic economy, expected improvement in global economic conditions relative to 2017, as well as the implementation of public-private partnership projects that were approved and awarded the previous years.
“FDI uptick is further seen in 2018 in line with the continued fasttracking and modernization of the country’s soft and hard infrastructure, growing interest from non-traditional investment sources, and improved global perception of the Philippines as an investment destination,” the BSP added.
The Duterte administration has earmarked as much as P9 trillion to bankroll key infrastructure projects under the Build Build Build program as part of its massive infrastructure buildup until 2022.
Socioeconomic Planning Secretary Ernesto Pernia said during the Philippine Economic Briefing held at the Clark Freeport Zone last month that the country is seen cornering a record $12 billion in FDI inflows this year amid the strong macroeconomic fundamentals and massive infrastructure build up under the Build Build Build program.
Inflows from FDIs, remittances, exports, tourism receipts as well as business process outsourcing (BPO) sector help shore up the country’s gross international reserves (GIR) that serve as buffer against external shocks.
Source: https://www.philstar.com/business/2018/07/12/1832657/fdi-inflows-rise-24-4-months#wBG8diKGSTgGIEfF.99