Foreign direct investments (FDI) to the Philippines rose by about 33 percent as of the end of September due to the improved image of the local economy among foreign fund managers.
The Bangko Sentral ng Pilipinas (BSP) on Tuesday reported that net inflows of FDIs reached $319 million in September alone, more than double the $132 million that went into the country last year.
This pushed the year-to-date figure to $3.1 billion at the end of September, up from $2.33 billion a year ago.
“The significant rise in foreign investment flows into the country reflects the favorable investor outlook on the Philippine economy on the back of sound macroeconomic fundamentals amid challenging global economic conditions,” the BSP said in a statement.
Net inflows, which means more money came in than what went out, were recorded across the three components that make up the FDI, namely equity capital, reinvested earnings of multinationals and loans extended by foreign companies to their local affiliates.
The largest net inflow was recorded in debt instruments to local affiliates, which reached $267 million in September from only $10 million a year ago.
“Parent companies continued to lend to their local subsidiaries to fund existing operations and expand their businesses in the country,” the BSP said.
The bulk of these loans to local affiliates came from multinationals based in Mexico, Japan, the United States, British Virgin Islands and the United Kingdom.
These were invested in the manufacturing, water supply, sewerage, waste management and remediation, financial services, real estate, arts and entertainment, and recreational industries, the BSP said.
In the meantime, a net inflow of $7 million in equity capital was also registered in the month. These investments came mainly from the United States, the United Kingdom, Japan, the Netherlands and Hong Kong.
These were channeled mainly to financial services and insurance, real estate, manufacturing, mining and quarrying, and professional, scientific and technical activities.
Reinvested earnings reached a net inflow of $42 million, lower by 32.2 percent compared to $65 million last year.