Net inflows of foreign direct investments jumped three times in October from a year ago to hit an 18-month high of $2 billion, amid sustained investor confidence in the strong macroeconomic fundamentals and growth prospects, data from the Bangko Sentral ng Pilipinas show.
The figure was significantly higher than $670 million recorded in the same month a year ago and was the strongest since April 2016 when net inflows reached $2.2 billion. FDIs refer to job-generating investments in companies based in the Philippines.
The figure brought the total FDI net inflows in the first 10 months of 2017 to $7.856 billion, up 20.6 percent from $6.52 billion registered in the same period in 2016. The 10-month figure also nearly matched the record annual FDI figure of $7.933 billion in the whole of 2016.
“The upswing in FDI reflects continued investor confidence in the country’s strong macroeconomic fundamentals and growth prospects,” the Bangko Sentral said.
More than three-fourths of FDI net inflows in October were in the form of equity capital, with gross placements rising to $1.6 billion from $84 million a year earlier.
A significant portion of the equity capital placements went to electricity, gas, steam and air-conditioning supply activities. The other sectors that received investment inflows were manufacturing; construction; real estate; and wholesale and retail trade.
Top sources of FDIs in October were the Netherlands, Singapore, Kuwait, the United States and Germany.
Investments in debt instruments, or inter-company borrowings between foreign direct investors and their subsidiaries/affiliates in the Philippines, amounted to $431 million in October. Reinvestment of earnings reached $57 million during the month.
Data showed that in the 10-month period, net equity capital investments increased 54.7 percent to $2.6 billion as gross equity capital placements of $3.1 billion more than offset withdrawals of $465 million.
Gross equity capital placements came mostly from the Netherlands, the United States, Singapore, Japan and Hong Kong.
By economic activity, equity capital investments were channeled mainly to electricity, gas, steam and air-conditioning supply; manufacturing; real estate; construction; and wholesale and retail trade activities.
Non-residents’ net investments in debt instruments totaled $4.6 billion in January to October, or 8.5 percent higher than the level recorded a year ago. Reinvestment of earnings amounted to $662 million.
The Bangko Sentral said net FDI inflows in 2017 were expected to reach $8 billion.