Vol. XXII, No. 115 [ BusinessWorld Online ]
Tuesday, January 13, 2009 | MANILA, PHILIPPINES
FOREIGN DIRECT investments (FDI) continued to come to the country, albeit at lower amounts compared with levels seen in 2007, even as the ongoing global financial crisis took its toll on investor sentiment.
Data released yesterday by the Bangko Sentral ng Pilipinas (BSP) showed a net FDI inflow of just $31 million in October last year, down from September’s $311 million and $129 million a year earlier.
This brought the 10-month investment tally to $1.42 billion, nearly 50% lower compared to net inflows of $2.65 billion in the same period in 2007, the central bank said.
"[FDIs were lower] as investment decisions were stalled by foreign investors’ concerns over the developments in financial markets, particularly in the weeks following the unfolding of the global financial crisis in late September," the BSP said in a statement.
Equity capital during the January-October period recorded net inflows of $858 million, over 50% lower than the previous year’s $1.9 billion.
These investments came from the US, Japan, Singapore, South Korea, Germany, Malaysia, Taiwan, Hong Kong, the United Kingdom, and the Netherlands.
The other capital account — comprised of intercompany borrowing and lending between foreign direct investors and their subsidiaries and affiliates — posted net inflows of $186 million, lower compared to $405 million in the same period in 2007.
More firms opted to invest their earnings back into the country or keep them in local banks as reinvested earnings rose to $374 million during the period from $339 million in the previous year.
Officials earlier said FDI could post a net inflow of $1.3 billion in 2008, down from an earlier forecast of $2.6 billion and 2007’s $2.7 billion, factoring in net outflows in last two months of the year. — Gerard S. dela Peña
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