Foreign investments’ surge into PH continued in May

Foreign direct investments continued to surge into the country for the January-May 2018 period, with registered net inflows hitting $4.8 billion, representing a growth of 49 percent from the comparable period in 2017, the Bangko Sentral ng Pilipinas said on Tuesday.

In a statement, the central bank said continued favorable investor sentiment boosted investments inflows on the back of the country’s solid macroeconomic fundamentals and growth prospects.

The strong performance of inward investments in the first five months of the year comes in the heels of a record high FDI figure of $10 billion recorded for all of 2017.

The latest data revealed that net equity capital investments grew by 469.1 percent to $1.4 billion during the January-May period. Meanwhile, gross equity capital placements grew more than four times to $1.5 billion, while withdrawals amounted to $139 million.

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

“The placements were largely invested in manufacturing; financial and insurance; real estate; arts, entertainment and recreation; and electricity, gas, steam and air-conditioning supply activities,” the central bank said in a statement.

Debt instruments increased by 17.3 percent to $3.1 billion from $2.7 billion in the same period last year, and reinvestment of earnings amounted to $343 million during the period.

For the month of May alone, FDI net inflows rose more than twice to $1.6 billion from the $677 million recorded last year.

“All FDI components yielded higher net inflows during the month,” the BSP said.

About 80 percent of FDI net inflows were in the form of non-residents’ investments in debt instruments issued by local affiliates or intercompany borrowings, which grew by 135.7 percent to $1.3 billion from $564 million in 2017.

Net equity capital investments for the month increased more than five times to reach $241 million from $43 million during the same month last year.

Equity capital placements amounted to $257 million while withdrawals continued to be low at $15 million.

Singapore, the United Kingdom, Germany, the United States and Japan were the primary sources of the equity capital placements in May.

These were channeled largely to manufacturing; real estate; electricity, gas, steam and air conditioning supply; financial and insurance; and professional, scientific and technical activities.

Reinvestment of earnings amounted to $75 million, slightly higher by 5.7 percent than the $71 million recorded in May 2017.

BSP statistics on foreign direct investments cover actual inflows, which could be in the form of equity capital, reinvestment of earnings, and borrowings between affiliates.

In contrast to investment data from other government sources, BSP’s data include investments where ownership by the foreign enterprise is at least 10 percent.