MANILA, Philippines – Foreign direct investments surged by 64 percent in the first 10 months of 2014, driven by rosy prospects for the Philippine economy, the Bangko Sentral ng Pilipinas reported yesterday.
“The increase in net FDI inflows during the period was buoyed by favorable investor outlook on the Philippine economy on the back of sound macroeconomic fundamentals,” the BSP said.
Net FDI amounted to $5.32 billion in the 10-month period, surpassing the central bank’s $4.4-billion target for the whole of 2014. The figure was also $2.08 billion, or 64 percent, higher than the $3.24 billion in the same period last year.
By component, placements in debt instruments or borrowings made by local subsidiaries from their parent companies made up the bulk of the FDIs at $3.255 billion as of October, up 55 percent from $2.095 billion.
“This came about as parent companies abroad continued to lend to their local subsidiaries/affiliates to fund existing operations and/or the expansion of their businesses in the country,” the BSP said.
Equity capital or investments made by foreign firms in the Philippine units also surged 89 percent to $1.352 billion from $716 million, the central bank said.
Reinvested earnings also jumped 65 percent to $713 million as of October from $431 million.The central bank said these funds came mainly from the United States, Hong Kong, Japan, Singapore, and Taiwan. They were used for financial and insurance, manufacturing, real estate, wholesale and retail trade, and transportation and storage activities.
For October alone, FDIs amounted to $444 million, more than double the $219 million in the same month in 2013.
Equity capital soared 191 percent to $213 million from $73 million, while reinvested earnings increased 28 percent to $63 million from $49 million.
The country also saw placements in debt instruments grew 74 percent to $168 million from $96 million.
Last year, FDIs went up 20 percent to $3.86 billion, surpassing the BSP’s $2.1-billion forecast.