August FDI hit 16-month high of $1.203B | Inquirer Business

August FDI hit 16-month high of $1.203B

By: - Reporter / @bendeveraINQ
/ 06:16 PM November 10, 2017

 AP PHOTO/AARON FAVILA

The net inflow of job-creating foreign direct investments (FDI) in August reached a 16-month high of $1.203 billion, narrowing the drop in eight-month inflows, the latest Bangko Sentral ng Pilipinas data released Friday showed.

FDI in August jumped 70 percent from $708 million in the same month last year, the biggest since April 2016’s $2.244-billion inflow.

Article continues after this advertisement

To recall, about $2 billion in inflows entered the economy in April last year when Security Bank took in Japanese banking giant Bank of Tokyo-Mitsubishi UFJ as a strategic partner with a 20-percent stake, resulting in a fresh capital infusion of P36.9 billion.

FEATURED STORIES

In a statement, the BSP said the robust FDI inflows in August “reflected continued favorable investor sentiment on the Philippine economy on the back of the country’s strong macroeconomic fundamentals.”

“All FDI components posted net inflows during the period. In particular, net equity capital investments surged to $611 million from $8 million a year ago,” the BSP noted.

Article continues after this advertisement

The equity capital placements in August mostly came from Hong Kong, Japan, the Netherlands, Singapore and the United States.

Article continues after this advertisement

The bulk of these equity were infused into the following sectors: electricity, gas, steam and air conditioning supply activities; manufacturing; real estate; transportation and storage; as well as wholesale and retail trade.

Article continues after this advertisement

“Investments in debt instruments (or intercompany borrowings between foreign direct investors and their subsidiaries/affiliates in the Philippines) amounted to $533 million, albeit lower by 15.7 percent than last year’s level. Meanwhile, reinvestment of earnings was pegged at $59 million during the month,” according to the BSP.

Finance Secretary Carlos G. Dominguez III earlier expressed optimism that two recent FDIs will bolster this year’s inflows—the $1.3-billion deal between Energy Development Corp. and the consortium of Macquarie Infrastructure and Real Assets and Arran Investment Pte. Ltd., as well as the $1-billion acquisition of homegrown cigarette manufacturer Mighty Corp. by Japan Tobacco International’s Philippine unit.

Article continues after this advertisement

At the end of the first eight months, FDI net inflows amounted $5.107 billion, down 5.2 percent from $5.385 billion as of August last year.

“The main reason for the decline in FDI [at end-August] was the lower equity capital placements and higher withdrawals during the period, decreasing net equity capital investments by 40.3 percent to $883 million from $1.5 billion,” the BSP explained.

“In contrast, investments in debt instruments amounted to $3.7 billion, an expansion of 8.4 percent from $3.4 billion last year. In addition, reinvestment of earnings grew by 6.4 percent to $546 million during the period,” it added.

For 2017, the BSP had projected FDI inflows to reach $8 billion.

In June, the BSP jacked up its 2017 FDI forecast from $7 billion previously, as the 2016 inflow hit a record-high of $7.933 billion.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

“The BSP expects the Philippines to sustain FDI inflows this year, close to the $8-billion level in 2016. These prospective FDIs are expected to be channeled mainly to the manufacturing sector (such as electronics and motor parts), which can help create employment and more growth opportunities,” it said last month.

TAGS: Bangko Sentral ng Pilipinas, FDI, foreign direct investments, Philippine news updates

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.