APD | Foreign direct investments reaches US$9.8 B in 2018

By APD writer Melo M. Acuna 

MANILA,Mar.11(APD) – The Bangko Sentral ng Pilipinas said foreign direct investments (FDI) registered US$677 million net inflows last December 2018.  However, this level is 4.8 percent lower than the US$712 million net inflows recorded in December 2017.

The decline in FDI was due largely to the 57.6 percent drop in net investments of equity capital to US$132 million from US$312 million a year ago.

In a statement released today, the BSP said equity capital placements during the month originated mainly from Thailand, the United States, Japan, Singapore and the Netherlands.  According to economic activity, said placements were invested in 1. financial and insurance, 2. electricity, gas, steam and air conditioning supply, 3. wholesale and retail trade, 4. manufacturing and 5. real estate industries.

Reinvestment of earnings also declined to US$61 million from US$65 million.  

Net investments in debt instruments consisting mainly of intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines, increased by 44.7 percent to US$484 million in December 2018 from US$ 335 million in December 2017.

The BSP said on an annual basis, FDI inflows reached US$9.8 billion in 2018, down by 4.4 percent from the US$10.3 billion net inflows in 2017.  Net investments of equity capital were lower at US$2.3 billion compared to US$3.4 billion recorded in 2017.  The bulk of equity capital placements in 2018, according to the BSP statement, were sourced mainly from Singapore, the United States, Hong Kong, Japan and China.

These were channeled to 1. Manufacturing, 2. Financial and insurance, 3. Real estate, 4. Electricity, gas, steam and air conditioning and 5. Arts, entertainment and recreation industries.

Reinvestment of earnings also declined slightly by 0.4 percent to US$859 million in 2018 from US$863 million in 2017.  By contrast, net availment  of debt instruments rose by 11.3 percent to US$6.7 billion in 2018 from US$6 billion in 2017.

(ASIA PACIFIC DAILY)