Long-term foreign investments continue record rise in Q3

Long-term capital brought by investors into the Philippines continued to grow at a healthy clip in the first nine months of the year, thanks to the sustained confidence of foreign businesses in the country that defied the skittishness of their counterparts managing short-term funds.

According to the Bangko Sentral ng Pilipinas, foreign direct investments during the first three quarters of 2018 reached $8 billion compared to the $6.5 billion recorded during the same period last year—a growth of 24.2 percent.

“[This was] on account of the increases registered in all FDI components,” the central bank said in a statement. “Investment inflows continued, buoyed by investor confidence in the Philippine economy on the back of strong macroeconomic fundamentals and high growth prospects.”

In particular, investments in debt instruments reached $5.5 billion, representing an increase of 19.6 percent from the $4.6 billion a year ago. Net equity capital investments also rose by 52.1 percent to $1.9 billion from $1.2 billion last year.

The bulk of the equity capital placements during the period came from Singapore, Hong Kong, the United States, Japan and China. These investments were channeled largely to manufacturing; financial and insurance; real estate; arts, entertainment and recreation, and electricity, gas, steam and air-conditioning supply activities.

Reinvestment of earnings amounted to $614 million during the period, the central bank said.

For the month of September 2018, foreign direct investments registered $569 million in net inflows, which was lower than the $807 million in net inflows registered in the same month last year.

This developed as equity capital withdrawals of $187 million exceeded equity capital placements amounting to $69 million, the central bank said.

During the period, equity capital infusions originated largely from the United States, Japan, Macau, Hong Kong and China.

These investments were channeled mostly to real estate; manufacturing, and electricity, gas, steam and air-conditioning supply activities.

Meanwhile, debt instruments—consisting mainly of intercompany borrowings or lending between foreign direct investors and their subsidiaries and affiliates in the Philippines —expanded by 24.3 percent to $609 million from $490 million in the same month last year.

Reinvestment of earnings amounted to $78 million during the month.