MANILA, Philippines–More durable investments flowed into the Philippines in June as multinationals kept earnings in the country and expanded operations, while foreign firms infused more cash in domestic companies, official data released Wednesday showed.
This put the country on track to recording its highest level of foreign direct investments (FDIs) this year.
The original goal for 2014 has also been comfortably breached.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said surging investments in June “continued to reflect strong investor confidence in the country’s solid macroeconomic fundamentals.”
On Wednesday, the BSP said FDIs, which are long-term bets on the Philippines, reached $588 million in June, better than May’s $463 million in net inflows.
This brought the year-to-date level to $3.57 billion, 76.9 percent better than the same semester in 2013.
For all of 2014, the government only expected to book $1.1 billion in FDIs, which contribute more directly to job creation and economic activity.
Foreign portfolio investment inflow or “hot money,” meanwhile, serves as a barometer for investors’ confidence in the local economy.
According to the BSP, gains were seen across the board, with the biggest from lending of multinationals to their affiliates and subsidiaries in the country, which reached $459 million, up four-fold year-on-year.
Foreign companies’ lending to their local subsidiaries is booked as an investment because this usually funds the expansion of existing operations.
More multinationals also kept more of their earnings in the Philippines instead of repatriating these profits.
Retained earnings rose to $75 million from $59 million last year.
Equity capital investments, meanwhile, reversed to a net inflow of $54 million from $192 million in outflows the year before.
The bulk of these equity capital investments—emanating mainly from the United States, Singapore, Japan, Hong Kong and Germany—was channeled mainly to real estate; manufacturing; transportation and storage; mining and quarrying; and administrative and support service activities.