Net inflows of foreign direct investment (FDI) almost doubled to $4.2 billion in the first half on sustained investor confidence, the Bangko Sentral ng Pilipinas said Tuesday.
However, the net FDI inflows generated in June—the last month of the Aquino administration—slid to $238 million, the lowest monthly figure in 2016 thus far, and below the $404 million a year ago, BSP data showed.
Last June, equity capital withdrawals of $41 million outpaced the placements worth $36 million, resulting in $5 million in net outflows to reverse the net inflows amounting $215 million in the same month last year, the BSP said in a statement.
Foreign investments in debt instruments jumped 49.4 percent year-on-year to $182 million in June, but reinvestment of earnings dropped 7.8 percent to $62 million.
The first half net FDI inflows were nonetheless up 94.9-percent from $2.2 billion a year ago.
The BSP attributed the jump in FDI to “investors’ confidence in the Philippine economy on the back of sound macroeconomic fundamentals and robust growth.” The Philippine economy grew 6.9 percent in the first half.
The average economic growth of 6.2 percent in the first five years of the Aquino administration was also the fastest since the late 1970s such that Aquino’s economic managers declared that the Philippines was no longer the sick man of Asia, but the region’s rising star.
According to the BSP, investments of overseas-based parent firms in debt instruments issued by their local subsidiaries more than doubled to $2.4 billion at end-June from from $1.1 billion last year.
Also, net equity capital climbed 112 percent year-on-year to $1.4 billion “on account of the combined effects of higher gross equity capital placements ($1.6 billion from $884 million) and lower gross equity capital withdrawals ($166 million from $203 million),” the BSP added.
The BSP said most equity capital placements during the first six months were from Hong Kong, Japan, Singapore, Taiwan and the US.
The first half equity capital investments were poured mostly into the following sectors: accommodation and food service activities; construction; financial and insurance; manufacturing; and real estate.
End-June reinvestment of earnings, meanwhile, slid 0.7 percent year-on-year to $382 million.