By Kris M. Crismundo
MANILA, Oct. 10 (PNA) — The country’s net foreign direct investment (FDI) inflows in the first seven months of the year surged by 56.1 percent to USD 4.0 billion from January to July 2013’s net FDI inflows of USD 2.57 billion, the Bangko Sentral ng Pilipinas (BSP) reported Friday.
This is after the country’s FDI hit a 13th month high of net inflows amounting to USD 436 million in July this year.
“This reflects continued favorable investor sentiment on the Philippine economy on the back of the country’s strong macroeconomic fundamentals,” the BSP said.
The central bank noted that all FDI components registered net inflows in July 2014. Net inflows of equity capital rose by 920.1 percent to USD 104 million from last year’s same period of USD 10 million.
“The bulk of equity capital investments during the month — emanating largely from the United States, Sweden, The Netherlands, Taiwan and Switzerland — was channeled mainly to financial and insurance; real estate; wholesale and retail trade; transportation and storage; and agriculture, forestry, and fishing activities,” the central bank said.
Net inflows of equity capital surged in July this year after equity capital placements increased by 87.8 percent year-on-year to USD 120 million along with the 69.9 percent decline in equity capital withdrawals only at USD 16 million.
Likewise, re-investments of earnings grew by 11.5 percent to USD 58 million in July this year from last year’s same period of USD 52 million.
However, the 43.8 percent decrement in net debt instrument inflows to USD 274 million in July 2014 pulled the total net FDI inflows by 20.6 percent year-on-year from USD 549 million.
“This developed as parent companies abroad continued to lend funds to their local subsidiaries/affiliates to sustain existing operations and expand their businesses in the country,” the BSP explained. (PNA)