Foreign direct investments (FDI) from January to November 2014 amounted to $5.7 billion, higher by 61.6 percent compared to the net FDI inflows for the same period in 2013.
The Bangko Sentral ng Pilipinas (BSP) reported that for the month of November alone, FDI inflows amounted to $399 million, up from only $297 million in November 2013.
This is mostly due to a surge in net equity capital investments in November 2014, which increased by more than 28 times to $201 million, from only $7 million in net equity capital investments in November 2013.
This net equity capital investments in November was channeled to the financial and insurance sector, manufacturing, real-estate, transportation and storage, and wholesale and retail trade activities. The funds came mostly from the United States, Hong Kong, Singapore, Japan and Australia.
The BSP said, from January to November, the net inflows of FDI came from sustained lending by foreign parent companies to their local subsidiaries or affiliates to support existing operations in the Philippines or fund-expansion projects.
“Net equity capital investments surged by 114.8 percent to $1.6 billion from $723 million, mainly on account of the contraction in equity capital withdrawals [by 71 percent] which more than offset the 15.6-percent decline in equity capital placements,” the BSP said.
The BSP added that the increase in net inflows of FDI and the high net capital inflow in November “reflected investors’ confidence in the Philippine economy on the back of sound macroeconomic fundamentals and strong growth prospects.”
Meanwhile, reinvestments of earnings and investments in debt instruments posted positive balances from January to November 2014, although lower than what were recorded during comparable periods in 2013. Specifically, investments in debt instruments contracted by 37.1 percent, while reinvestment of earnings declined by 9.4 percent.
source: Business Mirror
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