Philippine FDI Grows 41 Percent in 2016

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Foreign direct investments (FDI) in the Philippines grew 40.7 percent year-on-year in 2016 to US$7.9 billion, data released by the Bangko Sentral ng Pilipinas (BSP) showed.

The robust full-year 2016 FDI was attributed to the strong investors’ confidence in the country’s solid macroeconomic fundamentals, the BSP said.

For the month of December alone, FDI net inflows reached US$669 million, or more than double the US$272 million recorded in the same period in 2015.

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More than half (or US$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).

Net equity capital infusion reached US$206 million, as equity capital placements of US$294 million more than offset the US$88 million withdrawals.

Equity capital placements came mostly from Hong Kong, Japan, the United States, Singapore, and Belgium. These were channeled mainly in arts, entertainment and recreation; financial and insurance; manufacturing; real estate; and professional, scientific and technical activities. Meanwhile, reinvestment of earnings amounted to US$47 million during the month.

For the full year, equity capital investments posted net inflows of US$2 billion, 12.1 percent higher than the US$1.8 billion recorded last year. This resulted as placements of US$2.7 billion outweighed withdrawals of US$643 million.

Equity capital placements originated mainly from Japan, Hong Kong, Singapore, the United States, and Taiwan, and was infused largely to financial and insurance; arts, entertainment and recreation; manufacturing; real estate; and construction activities.

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Reinvestment of earnings declined by 4.9 percent to US$710 million during the year.

According to BSP, the statistics on FDI cover actual investment inflows, which could be in the form of equity capital, reinvestment of earnings, and borrowings between affiliates.

In contrast to investment data from other government sources, the BSP’s FDI data include investments where ownership by the foreign enterprise is at least 10 percent. – [BusinessTimes.ph]

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