MANILA, Philippines — Foreign direct investment (FDI) inflows surged 165.5 percent to a two-month high of $914 million in July from $344 million in the same month last year, reflecting the continued positive investor sentiment on the Philippine economy.
Data from the Bangko Sentral ng Pilipinas (BSP) showed equity placements jumped 61 percent to $278 million in July from $173 million in the same month last year, while withdrawals fell 52.3 percent to $17 million from $36 million.
The Central Bank said capital infusion for manufacturing, financial and insurance, real estate, wholesale and retail trade, as well as administrative and support services came primarily from Singapore, Taiwan, US, Korea and Japan.
This reflected the continued positive investor sentiment on the Philippine economy on the back of strong macroeconomic fundamentals and growth prospects,” the BSP said in a statement.
For the first seven months of the year, FDI inflows jumped 52.1 percent to $6.67 billion from $4.38 billion in the same period last year.
Capital infusion almost tripled to $2.02 billion from January to July this year compared to $681 million in the same period last year. Equity came from Singapore, Hong Kong, Japan, US, and China.
On the other hand, withdrawals fell 47.5 percent to $180 million from $343 million.
Meanwhile, reinvestment of earnings remained steady at $489 million, while investments in debt instruments rose 21.8 percent to $4.33 billion from $3.56 billion.
The BSP raised its FDI target for this year to $9.2 billion last June from $8.2 billion in November last year amid the positive investor sentiment.
The projected FDI inflow this year, however, is lower than the record $10.02 billion recorded last year.
The country’s gross domestic product (GDP) grew 6.3 percent in the first half of the year after slowing down to six percent in the second quarter from 6.6 percent in the first quarter.
Economic managers pegged the GDP target at seven to eight percent this year from 6.7 percent last year.
BSP Governor Nestor Espenilla Jr. earlier said the country’s solid macroeconomic fundamentals and growth prospects are attested to by continued favorable investor sentiment.
Data showed the FDI-to- GDP ratio has improved to 3.2 percent in 2017 from 1.6 percent in 2005.
From: Philstar (October 11, 2018)