Net FDI down 59% in Feb

MANILA, Philippines - Net foreign direct investments (FDI) went down by 59 percent to $350 million in February from $854 million in the same period last year, the Bangko Sentral ng Pilipinas  (BSP) reported yesterday.

The decline brought the  net FDI for the first two months of the year  25 percent lower at $1.377 billion compared with last year’s level.

Placements in debt instruments continued to account for the  bulk  of total  inflows in February at $201 million, central bank data showed. However, the amount was   20 percent  lower than the $251 million recorded in the same month last year.

 â€œThis resulted from sustained lending by parent companies abroad to their local subsidiaries/affiliates to support existing operations and to fund the expansion of their businesses in the country,” the BSP said.

Net equity capital inflows were also down by 85 percent to $79 million in February from $539 million a year ago.

These funds were mainly put into financial and insurance activities; real estate, transportation and storage; manufacturing; and mining and quarrying activities, the central bank said.

The bulk of   investments came from the US, Japan, Singapore, Germany and Hong Kong, the BSP added.

Reinvested earnings went up 11 percent to $70 million in February as more investors chose to keep their earnings in their local subsidiaries or affiliates on the back of rosy prospects for the Philippine economy.

FDIs, which are long-term investments in the country by foreigners, can come in the form of new companies setting up shop in the country or multinationals choosing to reinvest money earned in the Philippines into their existing local operations.