FDIs increase by 20% in 2013 | Inquirer Business

FDIs increase by 20% in 2013

Foreign investments hit $3.86B; net ‘hot money’ inflow topped $4B

MANILA, Philippines — Long-term foreign investments in the Philippines surged in 2013 amid the confidence toward the booming domestic economy, allowing the country to gain some ground from its richer neighbors.

Central bank officials attributed the 20-percent increase in foreign direct investments (FDIs) to $3.86 billion by the end of the year to confidence in the country’s booming economy, which grew faster than any other Southeast Asian market in 2013.


“The increase in FDIs during the year was buoyed by investors’ confidence in the country’s sound macroeconomic fundamentals,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.

Bulk of the foreign investments came in the form of lending of multinationals to their subsidiaries in the Philippines. This component rose six-fold to $2.5 billion in 2013, the BSP said.


“This developed as parent companies abroad continued to lend to their local affiliates to fund existing operations and expansion of their businesses in the country,” the BSP said.

Net inflow of equity capital reached $664 million, while multinationals’ reinvested earnings totaled $701 million, the BSP said.

The main sources of investments were Mexico, Japan, United States, British Virgin Islands and Singapore.

The increase in FDIs was accompanied by the growth in foreign portfolio investments or “hot money” to a record $4.2 billion in the same period.

Foreign portfolio investments, or “hot money,” are placements in securities such as stocks, bonds and government IOUs. These are indicative of the world’s confidence in the prospects of the domestic economy, but FDIs are seen as more long-term bets on the country’s growth.

Despite the increase, FDIs received by the Philippines was still much less than what other major Southeast Asian markets get. Last year, Malaysia reported a record net inflow of about $11.8 billion in FDIs. Foreign direct investments to Indonesia, Southeast Asia’s largest economy, reached $22 billion.

Still, the country’s FDIs in 2013 were still nearly twice the annual average the country has seen in the past 10 years.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, foreign direct investments, Gross Domestic Product
For feedback, complaints, or inquiries, contact us.

© Copyright 1997-2021 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.