Foreign investments continue uptrend

Long-term equity capital ploughed into the country by foreign investors continued its uninterrupted uptrend during the first eight months of the year, ignoring the volatility in short-term financial markets, the central bank said on Monday.

In a statement, the Bangko Sentral ng Pilipinas said foreign direct investments (FDIs) for the period January-to-August 2018 reached $7.4 billion, representing a 31-percent jump from the $5.7 billion in the same period last year.

For the month of August alone, FDIs continued to post net inflows amounting to $752 million, although 41.2-percent lower than the $1.3 billion in net inflows recorded in the same period last year.

Even as all foreign investment components registered positive balances, inflows were lower than the levels posted in August 2017.

“Inflows remained strong amid continued favorable investor sentiment on the Philippine economy on the back of the country’s strong macroeconomic fundamentals and growth prospects,” the central bank said.

In particular, net equity capital investments for the first eight months grew more than twice to $2 billion from $990 million in 2017.

This resulted as equity capital placements increased by 63.7 percent to $2.2 billion, while withdrawals declined by 45.9 percent to $196 million.

Equity capital infusions during the period came mainly from Singapore, Hong Kong, the United States, Japan and China.

During the first eight months, these investments were channeled mostly into firms engaged in manufacturing, financial and real estate, arts, entertainment and recreation, and electricity, gas, steam and air-conditioning supply activities.

Investments in debt instruments increased by 17.9 percent to $4.9 billion from $4.1 billion last year. Meanwhile, reinvestment of earnings reached $536 million during the period.

The bulk of the FDl net inflows for the month of August was in the form of investments in debt instruments (consisting mainly of intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines), which reached $534 million.