FDI net inflows rise to USD 1.5-B in September 2015; first 9 months level reaches USD 4.5-B

MANILA, Dec. 11 (PNA) — Foreign direct investments (FDI) reached a record high of USD 1.5 billion net inflows in September 2015, more than double its year-ago level of USD 680 million.

This developed as a result of the notable increase in non-residents’ investments in equity capital and debt instruments issued by their local subsidiaries/affiliates.

In particular, equity capital investments during the month increased more than threefold to USD 600 million, as gross placements of USD 1.2 billion more than offset withdrawals of USD 553 million.

The bulk of equity capital placements came from the United Kingdom, the Netherlands, Japan, the United States, and Germany. By economic activity, equity capital investments were channeled mainly to manufacturing; financial and insurance; construction; wholesale and retail trade; and real estate activities.

Moreover, investments in debt instruments increased by 89.7 percent to USD 869 million from USD 458 million on account of significant intercompany borrowings, particularly, in the transportation and storage, and construction industries.

Meanwhile, reinvestment of earnings declined by 17.1 percent to USD 51 million.

The surge in FDI inflows in September 2015 reflects investor confidence in the country’s strong macroeconomic fundamentals (sustained GDP growth of 5.8 percent in Q2 2015, manageable inflation, consistent build-up of foreign exchange reserves, and stable exchange rate).

For the period January-September 2015, FDI recorded net inflows of USD 4.5 billion, albeit slightly lower by 5.5 percent than the USD 4.8 billion net inflows registered in the same period last year.

Equity capital investments reached USD 1.4 billion on account of the 38.1 percent increase in gross placements to USD 2.2 billion, which exceeded withdrawals amounting to USD 789 million.

These equity capital investments emanated largely from the United States, Japan, the United Kingdom, the Netherlands, and Singapore. Investments were channeled mainly to manufacturing; financial and insurance; real estate; wholesale and retail trade; and construction activities.

Meanwhile, non-residents’ net investments in debt instruments reached USD 2.5 billion, lower by 16.2 percent than the previous year’s level of USD 3 billion. Reinvestment of earnings likewise declined by 11.7 percent to USD 575 million during the period. (PNA)