FDI inflow in July highest in 5 months

MANILA, Philippines —  The net inflow of foreign direct investments surged to its highest level in five months in July, ending four consecutive months of FDI contraction, the Bangko Sentral ng Pilipinas (BSP) said. Data released by the BSP showed net FDI inflow increased by 5.5 percent to $820 million in July from $778 million in the same month last year.

The July figure marked the highest since the $1.37 billion recorded in February.

“The improvement in FDI was driven by higher net inflows across all components,” the BSP said in a statement.

Investments in debt instruments, consisting mainly of intercompany borrowing between foreign direct investors and their subsidiaries or affiliates in the Philippines, went up by 2.7 percent to $610 million in July from $594 million in the same month last year.

Likewise, nonresidents’ reinvestment of earnings grew by 12.8 percent to $135 million from $120 million. Net investments in equity capital (other than reinvestment of earnings) jumped by 16.8 percent to $76 million from $65 million.

Equity infusions from Japan, the US and Singapore surged by 65.8 percent to $135 million in July from $81 million in the same month last year. The inflows were channeled into manufacturing and real estate industries.

On the other hand, equity withdrawals more than tripled to $59 million from $16 million.

Prior to July, net FDI flowing into the Philippines had been declining since March amid global economic uncertainties and still-elevated borrowing costs.

For the first seven months of the year, net FDI inflow climbed by 7.5 percent to $5.26 billion from $4.89 billion in the same period last year.

Investments in debt instruments contracted by 2.3 percent to $3.34 billion from January to July, while reinvestments of earnings slipped by 3.2 percent to $648 million.

Equity other than reinvestment of earnings soared by 58.3 percent to $1.27 billion. Placements grew by 58.5 percent to $1.59 billion while withdrawals jumped by 59.4 percent to $319 million.

The BSP expects FDI net inflows at $10 billion by this year and $10.5 billion by 2025.