May FDI inflows reached $473 million

Categories: Business Updates

Date Posted: 11 Aug 2014

More permanent foreign capital, also known as foreign direct investments (FDI), poured into the Philippines on net basis in May, totaling $473 million, data obtained from the Bangko Sentral ng Pilipinas show.

The numbers are indicative of the bullish long view foreign businesses now have of the Philippines, as these represent a reversal from net FDI outflows reported a year earlier.

In May 2013 the BSP reported the outmigration of FDI, influenced in part by global uncertainties associated with shifting fiscal and monetary events in both the US and in countries under the European Union.

May’s FDI inflows, likewise, pushed the aggregate FDI inflows to $2.9 billion in the first five months, rising from the $2.2 billion reported in the same five-month period last year.

The total FDI inflows in the first five months also exceeded the newly revised target of the government on FDIs to more or less $1 billion by the end of the year.

Compared to the previous month, however, the FDIs of $473 million in May was lower than the $597 million reported in April.

The rise in FDIs was evident across all major components, according to the central bank.

Investments of parent companies abroad in debt instruments issued by local affiliates contributed to the bulk of investment inflows during the period, totaling $338 million from net repayment by local affiliates of debt owed to foreign principals worth $12 million a year ago. These investments are labeled intercompany borrowings.

Equity capital inflows during the month also reversed to a net inflow of $73 million, from the net outflows of $117 million in May last year.

Equity capital originated mainly from the United States, Singapore, the United Kingdom, Japan and Germany.


Written by: Bianca Cuaresma


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