FDI surges 41% in 2016

March 13, 2017 at 15:43

Actual foreign investment inflows, more popularly known as net foreign direct investments (FDI), soared 40.7 percent year in 2016 to $7.93 billion from the previous year’s $5.64 billion despite global and local policy and market uncertainties.

Based on Bangko Sentral ng Pilipinas (BSP) data, all FDI components such as equity capital, reinvestment of earnings and borrowings between affiliates registered positive net flows. The BSP’s FDI figure only covers actual investment inflows.

“FDI inflows remained robust, supported by strong investors’ confidence in the country’s solid macroeconomic fundamentals,” according to the BSP.

As of end-2016, the net availment of debt instruments increased by 68.6 percent to $5.2 billion from $3.1 billion in 2015 while equity capital investments were also up 12.1 percent to $2 billion versus the previous year’s $1.8 billion.

“This resulted as placements of $2.7 billion outweighed withdrawals of $643 million,” said the BSP.

The registered equity capital placements were traced mostly from Japan, Hong Kong, Singapore, the US, and Taiwan. These funds were invested in financial and insurance; arts, entertainment and recreation; manufacturing; real estate; and construction activities.

Reinvestment of earnings, in the meantime, decreased by 4.9 percent last year to $710 million from $747 million in 2015.

For the month of December 2016 alone, FDI net inflows went up by 145.7 percent to $669 million from the previous year’s $272 million.

“More than half (or $415 million) of the net inflows during the month were non-resident affiliates’ net placements in debt instruments issued by resident affiliates (or intercompany borrowings),” explained the BSP.

The net equity capital investments amounted to $206 million during the month, while equity capital placements of $294 million more than offset the $88-million withdrawals, added the central bank.

Equity capital placements came mostly from Hong Kong, Japan, the US, Singapore, and Belgium. As for reinvestment of earnings, this totaled $47 million for the month of December which was 15.6 percent lower compared to the previous year’s $56 million.

Source: https://business.mb.com.ph/2017/03/13/fdi-surges-41-in-2016/