Foreign direct investments up 16.4% to $779m
September 15, 2011 at 09:53
Foreign companies placed and retained more investments in the Philippines in the first semester, encouraged by the country’s improving macroeconomic fundamentals, the Bangko Sentral said Monday.
The foreign direct investments yielded a net inflow of $779 million in the year through June, which is 16.4 percent higher than the $669 million recorded the year before.
“The respectable growth in FDI reflected favorable investor sentiment as the country’s macroeconomic fundamentals remained strong, amid a backdrop of a moderating and uneven global economic outlook,” the central bank said.
The economy expanded by 4.0 percent in the first six months despite the political instability in the Middle East and North Africa and the debt problems in Europe.
Most of the foreign investments were placed by companies from the United States, Japan, Hong Kong, Singapore and The Netherlands.
The major beneficiaries of the equity capital placements were real estate, manufacturing, mining and quarrying, financial and insurance activities, utilities and the wholesale and retail trade.
The foreign direct investments placed in June alone reached $64 million, up from $50 million a year ago but much less than the $161 million placed in May.
The Bangko Sentral said positive balances were recorded in all the major FDI categories in June, with reinvested earnings and other capital accounts posting net inflows of $25 million and $19 million, respectively.
But the net equity capital infusion amounted to $20 million, down by 66.7 percent from a year ago.
The net inflows of equity capital in the year through June grew by 82.1 percent to $193 million on lower withdrawals of capital by investors.
Gross equity capital placements reached $244 million, lower than the $294 million recorded a year earlier. Withdrawals of equity capital amounted to $51 million, which was also lower than the $188 million withdrawn a year ago.
Reinvested earnings yielded net inflows of $223 million, representing “the return on foreign direct investors’ investments that were subsequently retained in the domestic economy.”
The other capital account, consisting of inter-company borrowing or lending between foreign investors and their units in the country, also posted a net inflow of $363 million, up by 9.7 percent from the year before.
“The increase … was due primarily to higher trade credits extended to local subsidiaries by their parent companies abroad,” the central bank said.
Meanwhile, Malacañang said Monday increased public spending and fresh investments were expected to boost the Filipinos’ optimism further, after a second quarter survey showed more respondents expected their lives to improve in the next 12 months.
Deputy presidential spokeswoman Abigail Valte said Filipinos’ optimism bounced back as shown by the Social Weather Stations survey on June 3 to 6.
“The Filipino people remain overwhelmingly bullish on their personal prospects for the coming 12 months,” Valte said.
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By: Roderick T. dela Cruz with Joyce Pangco Pañares
Source: Manila Standard Today, Sept. 13, 2011
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