A surge of long-term equity inflows in February failed to reverse a weak start for foreign investments into the Philippines as fewer multinational firms sent funds to their local units coupled with an increase in capital withdrawals, the central bank said on Friday.
In a statement, the Bangko Sentral ng Pilipinas said that total foreign direct investments (FDIs) reached $1.4 billion in the January-February period—lower by 15.7 percent than the $1.6 billion net inflows registered in the comparable period last year.
“The decrease in FDI net inflows during the period was due mainly to the 67.1-percent decline in nonresidents’ net equity capital investments as placements decreased by 31.5 percent, while withdrawals grew by 236.5 percent,” the central bank said.
Equity capital placements during the period came mostly from Japan, China, South Korea, Mauritius and the United States.
By economic activity, equity capital infusions were mainly invested in financial and insurance services, transportation and storage, real estate, administrative and support services, and manufacturing industries.
Meanwhile, net placements in debt instruments increased by 12.9 percent to $1 billion from $896 million in the first two months of 2018. Reinvestment of earnings grew by 10.1 percent to $155 million during the period.
Total FDIs for all of 2018 reached $9.8 billion, which represented a 4.4-percent decline from the $10.3 billion recorded in the previous year.