Net foreign investments up 11% in 1st 2 months

Net inflows of job-generating foreign direct investments (FDIs) jumped 11 percent to $1.05 billion at the end of the first two months on sustained investor confidence in the economy, the Bangko Sentral ng Pilipinas said yesterday.

The end-February FDIs exceeded a year ago’s $947 million as investments in February alone grew by 7 percent to $366 million from $342 million last year, the latest BSP data showed.

Net FDI inflows last February were nonetheless lower than January’s $685 million.

“Investment inflows continued as investors remain confident in the Philippine economy on the back of strong macroeconomic fundamentals,” the BSP said.

Gross domestic product (GDP) expanded by 6.9 percent last year, one of the fastest among emerging economies in the region. Socioeconomic Planning Secretary Ernesto M. Pernia had said that GDP likely grew by 7 percent during the first quarter.

During the first two months, net placements in debt instruments climbed 133.2 percent to $821 million from $352 million a year ago.

As for net inflows of equity capital placements, these dropped 79.9 percent to $93 million from $463 million last year.

As of end-February, placements of equity other than reinvestment of earnings declined 70.8 percent year-on-year to $142 million while withdrawals jumped 118.5 percent to $49 million.

BSP data showed that the bulk of equity capital placements in the first two months came from investors based in Germany, Hong Kong, Japan, Singapore and the US.

The sectors that generated the majority of equity capital during the period were financial and insurance, information and communication, manufacturing activities, real estate, and wholesale and retail trade.

Reinvestment of earnings, meanwhile, grew 3.3 percent year-on-year to $137 million during the two-month period.—BEN O. DE VERA