Long-term funds surged into PH in April

The inflow of long-term investments into the country continued its momentum in April 2021 as foreign fund managers allocated more funds to Philippine-issued debt from both the public and private sectors, according to the central bank.

In a statement, the Bangko Sentral ng Pilipinas said that foreign direct investment (FDI) net inflows more than doubled at 114.4 percent year-on-year to $679 million from $317 million in the same period last year.

This brought the foreign direct investment net inflows for the first four months of 2021 to $3.1 billion—a 56.3-percent increase from $2 billion in the comparable period last year.

“The higher cumulative FDI net inflows was due to the improvements in all components, led by nonresidents’ net investments in debt instruments, which rose by 115.2 percent to $1.9 billion from $897 million,” the central bank said.

Net placements of equity capital also grew at a more modest 8.1 percent to reach $818 million from $756 million. Reinvestment of earnings increased slightly by 2 percent to $307 million from $301 million a year ago.

“Foreign direct investment net inflows in April 2021 rose on the back of positive foreign investor sentiment on the country’s macroeconomic fundamentals and strong growth prospects,” the central bank added.

In particular, net inflows during the month increased due mainly to the 121.2-percent expansion in nonresidents’ net investments in debt instruments to $500 million from $226 million in April 2020.

Likewise, nonresidents’ net investments in equity capital rose to $97 million in April 2021 from $3 million in the same month last year.

This developed as equity capital placements increased by 131 percent to $108 million from $47 million, while withdrawals decreased by 75.1 percent to $11 million from $44 million.

Equity capital placements during the month originated primarily from Japan, the United States and Singapore. These were invested largely in the manufacturing and real estate industries.

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