Wednesday August 15, 2018

Net inflows grow by 142.9% in May

FOREIGN direct investments (FDI) net inflows rose more than twice in May 2018 to $1.6 billion from $677 million recorded last year.

This reflects continued investor confidence in the Philippine economy’s strong macroeconomic fundamentals and growth prospects. All FDI components yielded higher net inflows during the month. About eighty percent of FDI net inflows were in the form of non-residents’ investments in debt instruments issued by local affiliates (intercompany borrowings), which grew by 135.7 percent to $1.3 billion from $564 million in 2017.

Net equity capital investments 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.

Equity capital placements were sourced primarily from Singapore, the United Kingdom, Germany, the United States and Japan. 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.

On a year-to-date basis, FDI net inflows for the first five months of 2018 grew by 49 percent to $4.8 billion from $3.3 billion last year. This is mainly on account of the expansion in net equity capital investments by 469.1 percent to $1.4 billion.

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. PR