June 11, 2019
NET foreign direct investments (FDI) in March hit a four-month low of $586 million and fell from the figure posted in the same month last year, the Bangko Sentral ng Pilipinas (BSP) announced on Monday.
The latest figure was the lowest since November 2018’s $535 million, and a 13.9-percent decrease from March 2018’s $681 million.
It dragged the first-quarter tally to $1.941 billion, down 15.1 percent from the amount in January to March 2018.
“This developed on account of the decline in net equity capital investments, as placements dropped to $126 million from $351 million in March 2018,” the BSP said of the March decline.
Net equity capital inflows dropped by 66.2 percent to $107 million during the month.
Equity capital placements during the month mostly came from Japan, the United States, Singapore and the Netherlands. These were largely invested in the manufacturing, real estate, accommodation and food service, wholesale and retail trade and arts, entertainments and recreation industries, according to the BSP.
Net investments in debt instruments — intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines — increased by 35.8 percent to $399 million from the year-ago’s $294 million.
Reinvestment of earnings also rose by 14.4 percent to $80 million from the year-earlier amount.
Net FDI inflows in the first three months of 2019, the Bangko Sentral said, were driven largely by the 66.7-percent drop in net equity capital to $295 million.
“In particular, equity capital placements declined to $568 million from $996 million, while withdrawals increased to $273 million from $109 million,” it explained.
Equity capital infusions during the period came mainly from Japan, China, the United States, Singapore and South Korea, and were channeled largely to the financial and insurance, real estate, transportation and storage, manufacturing, and administrative and support-service industries.
On the other hand, intercompany borrowings grew by 18.6 percent to $1.411 billion from $1.190 billion in the same quarter in 2018.
Reinvested earnings also jumped by 11.3 percent to $234 million in the three months from $211 million in the same period last year.
The Bangko Sentral expects net FDI inflows to reach $10.2 billion this year.
In 2018, net FDI inflows hit a two-year low of $9.802 billion — short of the central bank’s $10.4-billion goal and the lowest since 2016’s $7.933 billion — down 4.4 percent from 2017’s $10.256 billion.
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