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Philippines piques interest of Asian investors, data on FDI show

CHINA has overtaken the United States in terms of the volume of net equity capital investments to the Philippines in the January-to-October period last year, according to data from the Bangko Sentral ng Pilipinas (BSP).

However, a closer neighbor’s volume of long-term investments to the Philippines is almost triple that of the combined capital placements of China and the US during the period, BSP data indicated.

Figures from the BSP showed that Singapore was the top net equity capital investor to the Philippines during the period, comprising about half—or 45.5 percent—of the net equity capital investments.

Net equity capital investment is the second-largest component of the country’s measure of foreign direct investments (FDI).

Singapore’s net equity capital investment neared the billion-dollar mark to hit $905.65 million. This is 136-percent higher than the country’s $384.25-million investments in the same period last year.

According to the Asean Investment Report 2018, Singapore is the largest source of intra-Asean FDI, with about $18.3 billion FDI to the region in 2017. The report, however, stated that not all investments from Singapore are “indigenous,” as other multinational enterprises invest in the Asean via their Singapore operations.

Singapore’s net equity capital investments to the Philippines during the period surpassed the $309.54-million combined net equity capital investments of the two rival economic powerhouses, China and the US.

Increasingly Asian

The net equity capital investments of China—which is currently in a trade spat with the US—to the Philippines rose significantly and reached $189.33 million, from last year’s $13.25 million in the same period last year.

The volume of Chinese net equity capital investments was higher than that of the US, which declined to $120.21 million, from $454.33 million in 2017.

Latest data from the BSP showed that, overall, net equity capital investments to the Philippines are becoming increasingly Asian in origin.

In particular, the top 5 investor countries to the Philippines in the January-to-October period are all Asian.

During the period, Hong Kong followed Singapore, as its net equity capital investments amounted to $263.97 million. This is followed by China’s $189.33 million and Japan’s $183.51 million. Taiwan was the fifth-largest country net equity capital investor with $120.92 million.

Compared to 2017, however, the Netherlands was named the top country net equity capital investor to the Philippines with $1.54 billion. The US was the second largest at $454.33 million, followed by Singapore’s $384.25 million, Taiwan’s $77.53 million and Hong Kong’s $64.4 million.

The government projects overall FDI to hit $10.4 billion for the entire 2018. In end-October, total FDI hit $8.5 billion, which means that total investments in the last two months of 2018 should reach $1.9 billion to hit the government’s goal.

Debt instrument—loans extended by foreign companies to their respective subsidiaries in the Philippines—represented the largest component and is not broken down per country. The other component is reinvestment of earnings.

Source: https://businessmirror.com.ph/phl-piques-interest-of-asian-investors-data-on-fdi-show/