Net foreign investments down to $17M in May

Long-term foreign investments in the Philippines slumped in May due mainly to “higher withdrawal of equity capital and net repayment of debt instruments,” according to the Bangko Sentral ng Pilipinas.

BSP data released this week showed the net foreign direct investments (FDI) flows dipping to $17 million in May, or less than 10 percent of the $202 million posted in April.

The net inflow of FDIs in May this year was also lower than the $117 million in registered in the same month last year.

Net equity capital outflows reached $14 million in May, coming from net inflows of $58 million in the same month in 2012. This was the result of withdrawals of investments by foreigners amounting to $90 million, up from only $6 million the year before. The outflows offset the equity inflows of $76 million in May 2013, which was higher than the $64 million in inflows in the same month last year.

The BSP said Singapore, the United States, Japan, Italy and Germany were the largest sources of foreign direct investments in May. The bulk of the investments went to the real estate, manufacturing, agriculture, wholesale and retail trade, and construction industries.

Multinational firms’ lending to their local subsidiaries—which were classified as investments in the country—reached $67 million, lower by 30.3 percent from $98 million in the same period last year.

The net FDI inflows in May brought the year-to-date total to $1.522 billion, lower than the $1.666 billion recorded in the same five-month period last year.

For the five-month period, foreign investments went to the manufacturing, water supply and sewerage, waste management, real estate, and arts and entertainment industries since the start of the year. Investments during the first five months came mainly from Mexico, Japan, the US, Malaysia and the British Virgin Islands.