MANILA, Sept. 10 (PNA) — Foreign direct investments (FDI) posted net inflows amounting to US$ 588 million in June 2014, a turnaround from the US$ 26 million net outflows registered in the same period last year.
This developed as increases were registered across FDI major components.1,2 In particular, investments in debt instruments rose by more than four-fold to US$ 459 million from US$ 108 million in the same period last year.
This resulted on account of higher lending of parent companies abroad to their local affiliates to fund existing operations and business expansion plans in the country.
Equity capital transactions which reversed to net inflows of US$ 54 million from net outflows of US$ 192 million a year ago, also helped boost FDI level in June 2014.
The bulk of these equity capital investments—emanating mainly from the United States, Singapore, Japan, Hong Kong, and Germany—was channeled mainly to real estate; manufacturing; transportation and storage; mining and quarrying; and administrative and support service activities.
Furthermore, reinvestment of earnings increased from US$ 59 million to US$ 75 million.
On a cumulative basis, net inflows surged by 76.9 percent to US$ 3.6 billion for the first six months of the year from US$ 2 billion in the previous year, which continued to reflect strong investor confidence in the country’s solid macroeconomic fundamentals.
The increase in FDI during the period was brought about by the large increments in all FDI major components.
Investments of parent companies abroad in debt instruments issued by local affiliates (or intercompany borrowings) reached US$ 2.4 billion from US$ 1.2 billion a year ago. Equity capital also posted net inflows of US$ 762 million, 30.7 percent higher than the year-ago level of US$ 583 million, as placements of US$ 1.1 billion more than compensated for the US$ 356 million withdrawals.
Equity capital investments—which emanated largely from the United States, Hong Kong, Singapore, Japan, and the United Kingdom—were channeled largely to activities related to financial and insurance; real estate; manufacturing; wholesale and retail trade; and transportation and storage activities.
Meanwhile, reinvestment of earnings increased by 72.2 percent to US$ 400 million from US$ 232 million last year. (PNA)