The Central Bank of the Philippines reports that foreign direct investment (FDI) inflows increased by 227 percent to reach US$533 million in July 2013 compared to the US$163 million posted in the same month last year. This reflected the continued confidence of investors in the Philippine economy on the back of strong macroeconomic fundamentals.
In particular, non-residents’ placements in debt instruments issued by local affiliates registered net inflows of US$473 million during the month, increasing by 606.6 percent from US$67 million last year.
Equity capital yielded net inflows of US$7 million as gross placements of US$61 million more than offset withdrawals of US$54 million.
Gross equity capital placements—sourced mostly from the United States, Germany, United Kingdom, Singapore and Taiwan—were channeled mainly to real estate; manufacturing; financial and insurance activities; wholesale and retail trade; and human, health and social work activities.
Reinvestment of earnings amounted to US$52 million, lower by 19.8 percent compared to US$65 million registered in the same month last year.
For the first seven months of 2013, net FDI inflows likewise rose by 22.4 percent to reach US$2.6 billion from US$2.1 billion posted in the same period last year.
By FDI component, gross equity capital placements expanded by 59.2 percent to US$2 billion from US$1.3 billion in the same period in 2012.
The bulk of equity capital investments—which came mainly from Mexico, Japan, the United States, the British Virgin Islands, and Malaysia—were directed to manufacturing activities; water supply, sewerage, waste management and remediation; financial and insurance activities; real estate activities; and arts, entertainment and recreation activities.
Non-residents’ net placements in debt instruments rose to US$1.6 billion in January-July 2013, more than fourfold the US$362 million recorded in the same period last year.
Parent companies abroad continued to lend funds to their local subsidiaries/affiliates to sustain existing operations or expand their businesses in the country. Reinvestment of earnings amounted to US$438 million, lower by 33.3 percent than the US$657 million recorded in the same period last year.