Foreign investments down 33% in Jan-Oct 2019

Net inflow of long-term equity investments to the Philippines grew by 33.7 percent to $672 million in October 2019 from $502 million in the same per­iod in 2018, according to the cen­tral bank.

In a statement released on Friday, the Bangko Sentral ng Pilipinas (BSP) said this was mainly on account of the expansion in nonresidents’ net investments in debt instruments issued by local affiliates or intercompany borrowings, which jumped by 60 percent to $534 million from $334 million in 2018.

Meanwhile, net inflow of equity capital slowed down to $58 million from $98 million in October 2018 following the decline in equity capital placements to $80 million from $112 million, coupled with the increase in withdrawals to $22 million from US$14 million.

“Equity capital infusions during the month came mostly from the United States, South Korea and Japan,” the central bank said, adding that placements during the period were invested largely in real estate, financial and insurance, and manufacturing industries.

Reinvestment of earnings amounted to $79 million, 12.7-percent higher than the $71 million recorded in October 2018.

For the period January-October 2019, net inflow of foreign direct investments (FDIs) reached $5.8 billion.

This was lower by 32.8 percent from the $8.6 billion posted in the same period in 2018.

The lower FDI net inflow reflected subdued investor sentiment due to the continued sluggish global economic activity, the BSP explained.

Net investments in debt instruments decreased by 27.3 percent to $4.3 billion from the $5.9 billion during the same period in 2018.

Likewise, net equity capital investments dropped by 65.4 percent as placements fell by 44.9 percent to $1.3 billion and withdrawals rose by 58.8 percent to $629 million. INQ