Net FDI up 123% in Aug

MANILA, Philippines - Foreign direct investments (FDI) more than doubled in August on the back of  sustained investor confidence in the Philippines, the Bangko Sentral ng Pilipinas (BSP) said yesterday.

Net FDI inflows amounted to $143 million in August, a strong 123-percent increase from the $64 million recorded in the same period a year ago.

This brought the eight-month tally to $2.8 billion, or 25.4 percent more than a year ago and exceeding the $2.2-billion target for the whole of 2013.

“The significant rise in foreign investments into the country reflects the positive outlook of investors on the Philippines’ economic prospects in spite of the challenging global economic conditions,” the BSP said.

The economy grew by a faster-than-expected 7.6 percent in the first half, above the government’s six- to seven-percent target for the year.

“Domestic economic prospects have been supported by sound macroeconomic fundamentals and a smoothly functioning financial system,” the central bank said.

The BSP said reinvested earnings fell 18 percent to $54 million from $66 million, while placements in debt instruments or borrowings made by local subsidiaries from their parent firms abroad amounted to an inflow of $47 million from an outflow of $44 million last year.

The central bank gross equity placements during the month mostly came from the United States, Singapore, the United Kingdom, Japan, and Germany.

These funds went into financial and insurance; real estate; manufacturing; human, health and social work; and information and communication activities, the BSP said.

Net equity capital placements slid 50 percent to $581 million during the eight-month period from $1.159 billion a year ago, while reinvested earnings declined 32 percent to $492 million from $723 million.

Placements in debt instruments, meanwhile, surged 430 percent to $1.685 billion from January to September this year.

The jump was due to parent companies funding their Philippine units’ existing operations and expansion plans, the BSP said.