Foreign investments up 16.6% in Q1

The net inflow of job-generating foreign direct investments (FDI) jumped by almost a third to $509 million in March on the back of sustained investor confidence nine months into the Duterte administration, the Bangko Sentral ng Pilipinas said Tuesday.

The latest BSP data showed that the net inflow of FDIs last March rose 30.6 percent from $390 million a year ago and was higher than February’s $366 million.

At the end of the first three months, FDIs climbed 16.6 percent to $1.56 billion from $1.34 billion as of end-March last year.

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

The gross domestic product (GDP) grew 6.4 percent during the first quarter, lower than expectations but still among the fastest economic expansion in emerging Asia.

During the first three months, net investments in debt instruments increased 108.8 percent to $1.27 billion from $606 million a year ago.

End-March net investments in equity capital, however, dropped 81.7 percent to $101 million from $550 million last year.

At the end of the first quarter, placements of equity other than reinvestment of earnings declined 70.8 percent year-on-year to $191 million, while withdrawals decreased 12.8 percent to $91 million.

BSP data showed that most of the equity capital investments from January to March were poured in by investors from Germany, Hong Kong, Japan, Singapore and the United States.

The sectors that contributed the bulk of equity capital infusions during the three-month period were financial and insurance, information and communication, manufacturing, real estate as well as wholesale and retail trade.

Reinvestment of earnings at end-March, meanwhile, rose 6.7 percent to $193 million from $181 million a year ago.

For 2017, the government targets net FDI inflows to reach at least $7 billion.

Last year, the Philippines attracted a record $7.93 billion in net inflows of FDIs, up 40.7 percent from $5.64 billion in 2015.

During the month of March, “investments in debt instruments (or lending by parent companies abroad to their local affiliates to fund existing operations and business expansion) contributed largely to FDI net inflows during the period, registering an increase of 75.1 percent to $445 million from $254 million last year,” the BSP said.

“Net equity capital investments amounted to $7 million as gross equity capital placements of $49 million more than offset the $42-million withdrawals” in March, the BSP added.

The top sources of equity capital placements last March were Hong Kong, Japan, the Netherlands, Singapore and the US.

The bulk of FDIs that month went to financial and insurance; manufacturing; professional, scientific and technical activities; real estate, and wholesale and retail trade.

Reinvestment of earnings increased 16.1 percent year-on-year to $56 million in March.