September 11, 2019
NET foreign direct investments (FDI) hit a nearly two-year low of $430 million in June and fell from the figure posted in the same month last year, the Bangko Sentral ng Pilipinas (BSP) announced on Tuesday.
The latest figure — the lowest since July 2017’s $352.32 million and a 48.5-percent decrease from $836 million a year ago — brought the year-to-date tally to $3.57 billion, down 38.8 percent from the amount recorded in the first half of 2018.
In a statement, the central bank blamed the decline on lower intercompany borrowings and equity capital investments.
Net inflows in debt instruments — or lending by foreign companies abroad to their local affiliates to fund existing operations and expansion efforts — fell by 44.4 percent to $317 million from $570 million a year ago.
Net investments in equity capital also decreased by 86.5 percent to $25 million from $184 million.
Equity capital placements during the month mostly came from Singapore, the US, Japan, The
Netherlands and China. These were largely invested in real estate, manufacturing, financial and insurance, electricity, gas, steam and air-conditioning supply, and transportation and storage industries.
Meanwhile, reinvestment of earnings rose by 8.3 percent to $89 million from the year-earlier amount.
Net FDI inflows in the first half of the year, the BSP said, resulted from the decline in equity capital investments to $361 million from $1.58 billion.
Placements dipped by 50.8 percent to $860 million, while withdrawals increased by 206.6 percent to $499 million.
Equity capital infusions during the period came mainly from Japan, the US, Singapore, China and South Korea. These were channeled into financial and insurance, real estate, manufacturing, transportation and storage, administrative and support service.
Intercompany borrowings also fell by 28.8 percent to $2.70 billion from $3.80 billion in the same period in 2018.
On the other hand, reinvested earnings jumped by 12.1 percent to $507 million in the first six months of 2019 from $453 million a year ago.
The Bangko Sentral expects net FDI inflows to reach a downwardly revised $9 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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