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FDIs rise to $436 million in February – BSP

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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