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MANILA — Job-creating foreign direct investment (FDI) continued the upward trend with $685 million generated in January, up 13.2 percent year-on-year, on sustained investor optimism, Bangko Sentral ng Pilipinas data released Monday showed.
In a statement, the BSP said net inflows of FDI increased from $605 million during the same month last year as well as the preceding month’s $669 million because “investors remain optimistic on the growth potential of the economy backed by strong macroeconomic fundamentals.”
The economy grew 6.9 percent IN 2016, among the fastest in the region. Socioeconomic Planning Secretary Ernesto M. Pernia had said gross domestic product (GDP) expansion during the first three months would likely hit up to 7 percent.
“Non-residents’ investments in debt instruments (or lending by parent-companies abroad to their local affiliates to fund existing operations and business expansion) grew by 122.6 percent to $566 million from the year-ago level of $254 million,” the BSP said.
However, the BSP said “non-residents’ net equity capital placements declined by 82.8 percent [to $48 million from $277 million a year ago] due primarily to the drop in fresh equity capital infusions.”
The BSP nonetheless noted that equity capital placements worth $63 million exceeded the $15 million in withdrawals during the month.
The bulk of equity capital in January came from Germany, Hong Kong, Japan, Singapore and the United States.
Most of the equity capital inflows at the start of the year were poured into the following sectors: administrative and support service; construction; electricity, gas, steam and airconditioning supply; financial and insurance activities; as well as wholesale and retail trade.
Reinvestment of earnings, meanwhile, dropped 3.1 percent to $71 million from $73 million a year ago.
In 2016, the Philippines attracted a record $7.933 billion in net FDI inflows, up 40.7 percent from 2015’s $5.639 billion.
For 2017, the government targets FDI to reach $7 billion. SFM