FDI jumped 57% to $572 million in May

The net inflow of job-creating foreign direct investment (FDI) jumped 57 percent year-on-year to $572 million in May but the five-month total fell by almost a fourth due to a high base last year, the latest Bangko Sentral ng Pilipinas data released Thursday showed.

The FDI registered last May grew from $364 million a year ago, “driven by continued positive outlook on the Philippine economy buoyed by strong macroeconomic fundamentals,” the BSP said in a statement.

However, the FDI that flowed in during the first five months dropped 23.8 percent to $3.006 billion from $3.946 billion last year.

To recall, the $2.244-billion net FDI inflow recorded in April last year was the largest-ever monthly figure, hence there was a high base to date.

In May alone, all FDI components posted net inflows, the BSP said.

Gross equity capital placements reached $83 million last May, exceeding the $40 million in withdrawals. But the net equity capital investments of $43 million that month declined 45.6 percent from $79 million.

The equity capital that were generated in May were mainly invested in the following: electricity, gas, steam and air-conditioning supply; financial and insurance; manufacturing; real estate; as well as wholesale and retail trade sectors.

Bulk of the equity capital investments last May were sourced from Hong Kong, Japan, Malaysia, Singapore and the United States.

Investments in debt instruments, which are largely comprised of intercompany borrowings or lending between foreign direct investors and their local affiliates or subsidiaries, climbed 108.3 percent in May to $459 million from a year ago’s $220 million.

Reinvestment of earnings grew 7.8 percent to $71 million from last year’s $65 million.

From January to May, net equity other than reinvestment of earnings slid by a faster 85.4 percent to $213 million from $1.454 billion last year.

The five-month equity capital placements mostly came from Germany, Hong Kong, Japan, Singapore and the US.

The activities that received most of the equity capital investments during the first five months were the following: electricity, gas, steam and air-conditioning supply; financial and insurance; manufacturing; real estate; and wholesale and retail trade.

Net investments in debt instruments went up 12.8 percent year-on-year to $2.448 billion, while reinvestment of earnings increased 7.5 percent to $345 million as of end-May.

The BSP expects FDI to hit the $8-billion mark this year.

In June, the BSP adjusted upward its FDI forecast for 2017 from $7 billion previously, as actual inflows last year reached a record $7.933 billion, up 40.7 percent from 2015’s $5.639 billion. JE