June 23, 2018, 10:39 am
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IN 2017: FDIs hit record high of $10B

More investors saw the country as a favorable investment destination in 2017  as inflows of foreign direct investment (FDI) reached a record high of $10 billion.

The Bangko Sentral ng Pilipinas said this is an increase of 21.4 percent from the year ago level of $8.2 billion.

“Investors continue to view the country as a favorable investment destination on the back of the country’s sound macroeconomic fundamentals and growth prospects,” the BSP said in a statement.

This is the third year the Philippines registered an increase in FDI inflows. 

2016’s inflows were 40.7 percent higher against the $5.6 billion posted in 2015.  

BSP said this was also due to strong investor confidence.

For the year 2015, the cumulative FDI net inflows was almost steady compared to $5.74 billion net inflows recorded in 2014. 

The central bank said all major FDI components registered increases in 2017.

Net equity capital investments expanded 25.9 percent to $3.3 billion, with gross placements of $3.7 billion exceeding withdrawals of $479 million. 

Equity capital placements originated largely from the Netherlands, Singapore, the United States, Japan and Hong Kong.

By economic activity, BSP said equity capital placements were channeled mainly to gas, steam and air-conditioning supply; manufacturing; real estate; construction; and wholesale and retail trade activities. 

Net availment of debt instruments rose  20.7 percent year-on-year to $6 billion. 

Reinvestment of earnings increased  9.3 percent to reach $776 million during the year.

In December 2017, FDI registered $699 million net inflows. 

This was lower, however, by 9 percent from the level recorded a year ago due largely to the 19.1-percent drop in net investments in debt instruments to $335 million. 

Net placements of equity capital likewise declined moderately by 0.4 percent to $305 million. 

On a gross basis, equity capital infusions reached $328 million, originating mainly from Singapore, Japan, the Netherlands, the United States and Luxembourg. 

The said placements were invested largely in manufacturing; real estate; wholesale and retail trade; information and communication; and arts, entertainment and recreation activities. 

Reinvestment of earnings, meanwhile, grew by 24.1 percent to $59 million in December 2017.

BSP explained its statistics on FDI covers actual investment 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, the BSP’s FDI data include investments where ownership by the foreign enterprise is at least 10 percent.

Furthermore, the BSP’s FDI data are presented in net terms such as equity capital placements less withdrawals, while the others do not account for equity withdrawals.
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