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Philippines: FDIs down 12% in April
MANILA, Philippines — Net inflows of foreign direct investments (FDI) slipped for the second straight month in April, but the Bangko Sentral ng Pilipnas (BSP) is confident of a strong recovery in the coming months to meet the new lower target of $9 billion for this year.
The BSP reported yesterday net FDI inflows declined by 11.8 percent to $961 million in April from $1.09 billion in the same month last year amid lower inflows and higher outflows.
Data showed equity inflows from the US, Singapore, Hong Kong and Japan fell by nearly 50 percent to $144 million in April from $287 million in the same month last year.
The capital flows were channeled to financial and insurance, real estate, manufacturing, electricity, gas, steam, and air-conditioning supply as well as construction industries.
On the other hand, outflows surged by 601 percent to $104 million in April from $15 million in the same month last year.
Meanwhile, non-residents’ investments in debt instruments consisting mainly of loans extended by parent companies abroad to their local affiliates went up by 12.1 percent to $92 million from $80 million.
Likewise, the BSP said reinvestment of earnings grew by 16.3 percent to $830 million from $737 million.
For the first four months, data showed net FDI inflows decreased by 14 percent to $2.9 billion from $3.38 billion in the same month last year.
Equity placements from Japan, US, China, Singapore, and South Korea plunged by 44.5 percent to $712 million from January to April compared to $1.28 billion in the same period last year.
On the other hand, pullout of investments surged by 205 percent to $377 million in the first four months from $124 million in the same period last year.
BSP Governor Benjamin Diokno told reporters on the sidelines of the 2019 awards ceremony and appreciation lunch for BSP stakeholders FDI inflows in the country remain robust.
“At the minimum $9 billion. It will be higher. We’re very comfortable,” he said.
The BSP slashed the net FDI inflow target for 2019 to $9 billion from $10.2 billion last May.
Diokno said the Philippines has defied the global decline in FDI levels over the past few years due to easing inflation, increasing investors’ confidence and the record high satisfaction rating of President Duterte.
He cited the recent upgrade obtained from S&P Global Ratings to BBB+ or two notches above minimum investment grade and an outlook upgrade to positive from stable from Japan Credit Rating Agency (JCR).
Both Moodys Investors Service and Fitch Ratings have reaffirmed a credit rating of one notch above minimum investment grade for the Philippines.
Economic managers are working hard to obtain the much coveted A credit rating from debt watchers.
A poll conducted by the Social Weather Stations from June 22 to 26 showed a new record high satisfaction rating of 80 percent and 12 percent dissatisfied with the performance of President Duterte for a net score of “very good” +68.
“There’s a renewed confidence, not only renewed but actually confidence is increasing. The approval rating of the president is 80 percent no and that’s unusual on his third year. Its fantastic so we’re doing great,” Diokno said.
Source: https://www.philstar.com/business/2019/07/11/1933656/fdis-down-12-april#HkuVyPf4lQ6zRitv.99