FDI inflows jump 41% in 2016 to hit record high $7.9B

The Philippines in 2016 attracted a record $7.933 billion in foreign investments in job-generating brick-and-mortar projects, Bangko Sentral ng Pilipinas (BSP) data released Friday showed.

The full-year net haul jumped 40.7 percent from $5.639 billion in 2015.

In November, the 11-month FDI of $6.973 billion already surpassed the BSP’s adjusted 2016 target of $6.7 billion. For 2017, the government targets FDI to reach $7 billion.

In a statement, the BSP noted that “FDI inflows remained robust, supported by strong investors’ confidence in the country’s solid macroeconomic fundamentals.”

The BSP said all components of the FDI registered net inflows last year.

“Net availment of debt instruments rose by 68.6 percent to $5.2 billion from $3.1 billion in 2015. Moreover, equity capital investments posted net inflows of $2 billion, 12.1-percent higher than the $1.8 billion recorded [the previous] year. This resulted as placements of $2.7 billion outweighed withdrawals of $643 million,” according to the BSP.

Bulk of equity capital placements in 2016 came from Hong Kong, Japan, Singapore, Taiwan and the United States.

Most of the equity capital inflows last year were poured into the following sectors: Arts, entertainment and recreation; construction activities; financial and insurance; manufacturing; and real estate.

However, total reinvestment of earnings from January to December dropped 4.9 percent year-on-year to $710 million.

In December alone, net FDI inflows hit $669 million, up 145.7 percent from $272 million during the same month in 2015.

That same month, foreign investments in debt instruments or intercompany borrowings to fund existing operations and business expansion, which account for the bulk of FDI, jumped 198 percent year-on-year to $415 million.

The net inflow of equity capital during the month, meanwhile, rose 169 percent year-on-year to $206 million. Equity capital placements registered an inflow of $294 million, up 202.3 percent, while the $88-million outflow was 327.1-percent higher than a year ago.

According to the BSP, the top sources of equity capital in December were from Belgium, Hong Kong, Japan, Singapore and the US.

In terms of sectors, the largest equity capital placements last December were infused into the arts, entertainment and recreation; financial and insurance; manufacturing; professional, scientific and technical activities; and real estate.