MANILA, Philippines — The Philippines remains on the radar of foreign investors as direct investments surged by 143 percent to hit a seven-month high of $1.64 billion in May from $677 million in the same period last year, according to the Bangko Sentral ng Pilipinas.
“This reflects continued investor confidence in the Philippine economy’s strong macroeconomic fundamentals and growth prospects,” the BSP said.
The inflow of foreign direct investments in May was the highest since October last year when the figure reached $1.92 billion.
Inflows in the form of non-residents’ investments in debt instruments issued by local affiliates or intercompany borrowings surged by more than 135 percent to $1.3 billion in May from $564 million in the same period last year.
Net equity capital investments increased more than five times to reach $241 million from $43 million as equity capital placements almost tripled to $257 million from $83 million, while withdrawals plunged 62.5 percent to $15 million from $40 million.
Equity capital placements were sourced primarily from Singapore, the United Kingdom, Germany, US, and Japan and were channeled largely to manufacturing; real estate; electricity, gas, steam and air conditioning supply; financial and insurance; and professional, scientific and technical activities.
Reinvestment of earnings inched up by nearly six percent to $75 million from $71 million.
For the first five months, the BSP said net FDI inflows jumped by 49 percent to $4.85 billion from $3.25 billion in the same period last year.
This was mainly on account of the expansion in net equity capital investments to $1.37 billion from January to May this year, more than five times the $242 million recorded in the same period last year.
Equity placements amounted to $1.51 billion in the first five months, more than four times the $368 million recorded in the same period last year, while withdrawals rose by 10 percent to $139 million from $127 million.
Meanwhile, reinvestment of earnings remained steady at $343 million, while investments in debt instruments went up 17.3 percent to $3.13 billion from $2.67 billion.
The five-month net FDI inflows accounted for more than half of the full-year target of $9.2 billion amid the improving global perception of the country as an investment destination.
Despite the higher projection, the FDI inflow this year is expected to be lower than last year’s record inflow of $10.05 billion. Last year’s FDI inflows were higher than the $8.28 billion recorded in 2016 as investors continued to view the Philippines as a favorable investment destination.