MANILA, Philippines - Net foreign direct investments (FDI) went up by nearly 40 percent to $1.093 billion in the first nine months of the year from $782 million a year ago despite the drop in the September inflow, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
Net FDI for September declined by more than 60 percent to $55 million from $138 million a year ago.
Despite the drop, the BSP said, the nine-month total remained on track to meeting a just-revised forecast.
A net inflow indicates more investments entered the country than left.
BSP officials could not be reached for comment. But Victor Abola, senior economist at the University of Asia and the Pacific, said the country remained unattractive to foreign investors due to bureaucratic processes.
“We have to address policy inconsistencies. There are so many inconsistencies, especially in mining, utilities and infrastructure,” Abola said in a phone interview.
The government has held off from issuing new mining permits pending an overhaul of the mining revenue scheme targeted at increasing the state’s share. Meanwhile, only four of the eight public-private partnership projects promised to be rolled out this year have been put on the pipeline.
The year-to-date tally was almost 73 percent of this year’s revised forecast of $1.5 billion. Two weeks ago, BSP revised upwards its FDI outlook from the original $1.2 billion.
Data showed equity capital – which accounted for the bulk of investments – declined in September, but remained on growth territory as of the third quarter.
Equity capital – consisting mainly of foreign companies’ investments to their local offices – decreased 52.89 percent to $57-million net inflow. This brought the nine-month total to $1.2 billion, eight times higher than the $150 million last year.
Broken down, gross equity placements reached $1.397 billion, while gross withdrawals totaled $197 million.
The bulk of equity investments came from the US, Australia, the Netherlands, British Virgin Islands and Japan. Inflows were mainly channeled to the manufacturing, real estate, wholesale and retail, mining and quarrying, transportation and storage and financial and insurance sectors.
Reinvested earnings, on the other hand, dropped 69.23 percent to $20 million from $65 million in September. This worsened its year-to-date contraction at 56.32 percent to $121 million, data showed.
Other capital account items, meanwhile, remained on a net outflow amounting to $22 million in September, although this was an improvement from $48 million. This segment consisted largely of borrowing and lending between foreign companies and their local offices.
As of the third quarter, other capital account investments posted a net outflow of $228 million from $355-million net inflow a year ago, figures showed.
FDI is part of the country’s balance of payments, which measures the country’s capacity to service its foreign debts and meet its external obligations. Last year, FDI reached a net inflow of $1.26 billion.