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Net foreign direct investments reach $1.5B

LONG-TERM investments by foreigners in the Philippines rose by more than half in April, reflecting the country’s favorable business climate and stable economic conditions.

The Bangko Sentral ng Pilipinas (BSP) on Wednesday reported that foreign direct investments (FDI) reached a net inflow of $202 million for April, up 61 percent year-on-year. The net inflow for April was a reversal from the $78 million in FDI capital that left the country the month before.

This brought the year-to-date level to a net inflow of $1.5 billion, roughly just slightly lower than the level in the same four-month period in 2012.

The real estate, manufacturing and mining sectors continued to attract bulk of the foreign money that entered the country, the BSP said, adding that financial and insurance services were also major draws.

Bulk of the investments came from investors from the United States, United Kingdom, Hong Kong, Singapore and multilateral lenders.

FDIs are considered a more reliable indicator of the country’s attractiveness as an investment destination. Unlike placements in local stocks, bonds and government securities—often referred to as “hot money”—FDI capital is considered more stable since this cannot be pulled out as easily on the whims of fund managers.

Large investments in local corporations, the reinvestment of earnings made by multinational corporations in the country and loans extended by foreign firms to their local affiliates are counted as FDIs.

The BSP said reinvested earnings reached a net inflow of $64 million “as foreigners opted to retain their earnings locally on the expectation of sustained strong corporate performance.”

Borrowings among foreign firms and local subsidiaries reached a net inflow of $7 million—the same level as last year, the BSP said.

“Parent companies abroad continued to lend funds to their local subsidiaries to sustain existing operations or expand their businesses in the (Philippines),” the BSP said.

The biggest component came from equity investments, which grossed at $189 million during the month, more than sevenfold the $26 million recorded in April 2012. Gross investments were slightly offset by the $58 million in investment withdrawals, the BSP said. Paolo G. Montecillo

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Tags: Business , foreign direct investments

  • water_gate64

    All the lies and deceit in the world will not save the duplicitous Aquino administration from exposure to the obvious truth, that annual FDI is actually declining year on year in the Philippines, and the country will likely be overtaken by Myanmar during 2013; leaving it second from the bottom of the barrel in Asia. Aquino has already been on a score of overseas trips this year, squandering hundreds of millions of pesos in company with a retinue of obsequious acolytes, seeking favour and salivating at the opportunity to gorge themselves on food, drink and illicit shopping at the expense of Filipino taxpayers. So where exactly are the billions of investment dollars that Aquino has repeatedly claimed as the spoils of his worthless junkets; the truth is they do not exist and never will, whilst we remain saddled with a spineless leader who lacks the courage, personal integrity and basic intelligence necessary to bring about the widespread enduring change that is so desperately needed in this country.

  • kilabot

    lower than last year.
    compare that to asian neighbors,
    ph is kulelat;
    whatever happened to daang-matuwid?
    ask ti and inekon for starters.

    trickle-down, trickle-down, yeah yeah;
    inclusive, inclusive, it should be;
    all the way to sona, oh yeah.

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