Published on
10 May 2013 [ manilatimes.net ]
Written by
Mayvelin U. Caraballo Reporter
Foreign
direct investments (FDI) rose to $436 million in February 2013, reflecting an
increasing optimism over the country’s growth potential despite uncertainties
in the global economy, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
BSP data also
showed that the February 2013 FDI was higher compared to the $192 million
posted in the same month last year.
It added that
by FDI component, gross equity capital placements aggregated $230 million,
significantly higher by 74.2 percent from its year-ago level of $132 million.
The central
bank explained that the equity capital investments came from Japan, the United
States and Hong Kong.
It added that
the FDIs were directed to water supply, sewerage, waste management and
remediation activities; manufacturing; arts, entertainment and recreation and
real estate.
The central
bank also noted that these gross equity capital placements were partly offset
by the $15-million withdrawals of investments, resulting in $215-million net
inflows of equity capital during the month.
“These
developments are also an indication of improved investment climate in the
country on the back of sound macroeconomic fundamentals,” the BSP stated.
It continued
that reinvestment of earnings amounted to $60 million in February 2013, as
foreign investors opted to retain their earnings locally on account of
favorable domestic economic prospects amid low and stable inflation, as well as
strong external payments dynamics.
Nonresidents’
net placements in debt instruments issued by local affiliates (or intercompany
borrowings between foreign direct investors and their subsidiaries/affiliates
in the Philippines in the form of loans and debt securities) reached $161
million in February 2013. The BSP emphasized that this level was more than five
times the $30-million intercompany borrowings recorded in the same period last
year.
“Parent
companies abroad continue to lend funds to their local subsidiaries/affiliates
to sustain existing operations or expand their businesses in the country,” it said.
$1 billion in
two months
As a result
of these developments, the central bank noted that cumulative FDI for the first
two months of 2013 totaled $1 billion. However, it was slightly lower by 18.7
percent relative to the $1.2 billion recorded in the same period last year. In
particular, cumulative net inflows of equity capital settled at $377 million,
down by 55.8 percent compared to the $852 million posted in the same period in
2012.
“This came
about as gross equity capital placements of $1.1 billion for the first two
months of 2013 were offset by equity capital withdrawals of $726 million,” it
added.
Furthermore,
the central bank noted that gross equity capital placements came mostly from
Mexico, Japan, the United States, Malaysia and The Netherlands, and were
channeled mainly to manufacturing; water supply, sewerage, waste management and
remediation activities; financial and insurance activities and real-estate
sectors.
Meanwhile, reinvestment
of earnings summed up to $145 million, also lower by 19 percent than the
year-ago level of $179 million.
By contrast,
nonresidents’ placements in debt instruments issued by local affiliates
reached $490 million, more than twice the $214 million registered in the
comparable period a year ago.
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