July net FDIs biggest this year, so far

Posted on October 12, 2015 11:36:00 PM

NET foreign direct investments (FDI) reached their highest level for the year, so far, in July — fueled by a boost particularly in equity capital placements — but inflows in the first seven months of 2015 were a third less than levels seen in last year’s comparable period, the central bank said in a statement yesterday.

Net FDIs — a key source of jobs and business financing in the country — posted a net inflow of $458 million in July, up 1.6% from $451 million in 2014’s comparable month.

Equity and investment fund shares rose 40.4% to $231 million from $164 million. Broken down, net equity capital investments reached $152 million, up 45.3% year on year, as the $173-million placements exceeded $21 million in withdrawals that month.

“The bulk of these equity capital placements came from Singapore, Hong Kong, the United States, Japan and the United Kingdom. By economic activity, investments were mainly channeled to the financial and insurance, mining and quarrying, real estate, manufacturing, and wholesale and retail trade activities,” BSP said in a statement.

“Financial and insurance activities captured almost half of the increase in total equity capital placements during the period, reflecting investors’ confidence in the country’s sound financial system.”

Reinvested earnings grew 31.7% annually to $79 million, while foreign firms’ investment in debt instruments of local affiliates fell 20.7% to $227 million.

FDI inflows in July brought the seven-month tally to $2.477 billion, down 35.2% year on year.

Net equity capital placements edged up 1% to $805 million from $797 million, but failed to offset the declines in investment in debt instruments (down 51.6% to $1.2 billion) and reinvested earnings (down 12.7% to $464 million).

Equity capital placements in the seven months went mainly to manufacturing, financial and insurance, real estate, electricity, gas, air conditioning supply, as well as mining and quarrying.