FDI records net outflow of $13M in April

MANILA, Philippines - Foreign direct investments (FDI) were in the red for the first time this year, recording a net outflow of $13 million in April, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

“In April 2012, FDI posted a net outflow of $13 million. Notwithstanding the Philippines’ favorable macroeconomic conditions, investors were wary of potential spillovers of the eurozone’s sovereign credit problems,” BSP said.

“In April, concerns about the eurozone escalated as reflected in sharp increases in borrowing costs for some European countries and this has dampened global risk appetite,” it added.

The net outflow, data showed, was the first for this year, and even reversed the $78 million net inflow posted last year.

For the first four months though, there were still more investments that entered the country than left, with figures showing a cumulative net inflow of $837 million, up 46.6 percent from $571 million same period last year.

Net equity capital or investments amounted to $13 million in April, bringing the four-month tally to $944 million, almost five times than the $174 million inflow last year, data showed.

“Equity capital infusion for the period of January-April 2012 came mostly from the US, Australia, the Netherlands, United Kingdom, Japan and Bermuda,” the BSP said, adding that these flows were “channeled mainly to manufacturing, real estate, wholesale and retail, financial and insurance and mining and quarrying sectors.”

Reinvested earnings, meanwhile, posted a net inflow of $12 million in April, 66.7 percent lower from a year ago level. This caused a drop on its four-month figure to $42 million from $127 million last year.

Other capital accounts – consisting largely of borrowing among foreign companies and their offices here –continued to be on the negative for four months in a row. It recorded a net outflow of $38 million against a $19 million net inflow in April.

For the first four months, these accounts worsened to a net outflow of $149 million from a net inflow the previous year as Philippine branches paid their dues to their mother offices abroad.

FDI is part of the country’s balance of payments (BoP), which measures our capacity to service our debts and meet other obligations.