Nine-month net FDI inflow up 25% to $5.9B

Net inflow of job-generating foreign direct investments (FDIs) surged 25.3 percent in the first nine months of 2016 to $5.9 billion from $4.7 billion in the same period last year.

“The continued FDI inflows reflect investors’ confidence in the country’s economy on account of sustained growth prospects and strong macroeconomic fundamentals,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.

On a monthly basis, however, net FDI inflow fell 69.3 percent year-on-year in September to $469 million, the lowest so far in the first three months of the Duterte administration.

BSP data released Monday showed that net FDI inflow last September dropped by more than two-thirds from the $1.53 billion worth posted during the same month last year—the highest monthly amount in 2015.

September’s figure was the lowest monthly amount of net FDI inflow since President Duterte came into office, compared with July’s $503 million and August’s $711 million, BSP data showed.

However, during the first nine months of the year, it was in June—the Aquino administration’s final month in office, marking a transition to the new government—that the smallest monthly amount of net FDI inflow was recorded at $238 million.

In September, foreign investments in debt instruments or intercompany borrowings to fund existing operations as well as business expansion, which account for the bulk of FDI, declined by 66.3 percent to $296 million from $880 million a year ago.

Equity capital registered a net inflow of $138 million, as the $157 million in inflows exceeded the $19 million in outflows. The net inflow in equity capital, however, was down 77 percent from $600 million last year.

According to the BSP, the top sources of equity capital last September were Germany, Japan, the Netherlands, Taiwan and the United States.

In terms of sectors, the biggest equity capital placements that month were infused into administrative and support service activities, financial and insurance, manufacturing, real estate as well as wholesale and retail trade.

Reinvestment of earnings in September also slid 31.1 percent year-on-year to $35 million.

During the first nine months, investments in debt instruments jumped 40.8 percent to $3.71 billion from $2.64 billion a year ago. Equity capital posted a net inflow of $1.61 billion, up 9.3 percent year-on-year, as the $1.86 billion in gross placements surpassed the withdrawals worth $248 million.

End-September gross equity capital placements largely came from Hong Kong, Japan, Singapore, Taiwan and the US, the BSP said.

Most of the nine-month equity capital haul were poured into accommodation and food service; financial and insurance; manufacturing; real estate, and wholesale and retail trade activities.

Total reinvestment of earnings during the nine-month period, however, fell 4.8 percent year-on-year to $548 million.