FDIs stood at record high in July
Job-generating investments in the country rose to a record high in July as the Philippines continued to attract more capital from abroad, according to the central bank.
The country continued to be Southeast Asia’s strongest performer when it posted a net inflow in foreign direct investments (FDI) totaling $436 million in July.
The Bangko Sentral ng Pilipinas (BSP) said that, since the start of the year, foreign direct investments ended each month at a net inflow.
Year-to-date, the level of FDIs rose to $4.01 billion, higher than the $2.57 billion recorded in the same seven-month period of 2013.
“This reflected continued favorable sentiment on the Philippine economy on the back of the country’s strong macroeconomic fundamentals,” the BSP Friday said in a statement.
Foreign direct investments come in the form of multinational companies’ reinvested earnings in the Philippines, the same companies’ lending to local affiliates and subsidiaries, and new substantial investments by foreign firms. The money goes to the construction of new manufacturing and service facilities, which contributes directly to job generation.
The increase in investments was seen across the board, data from the BSP showed.
Net equity capital inflows surged to $104 million, or by more than tenfold, from $10 million in the same month last year. Net inflows of equity capital rose significantly in July on the back of the 87.8-percent year-on-year increase in equity capital placements to $120 million.
The bulk of equity capital investments during the month—largely coming 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.
In addition, the reinvestment of earnings reached $58 million—11.5 percent higher than the $52 million recorded in July last year.
Meanwhile, investments in debt instruments posted a net inflow of $274 million—43.8 percent lower than the level posted during the same month in 2013.
