FOREIGN investors’ long-term investments to the country almost tripled in June, but the month’s surge was not enough to lift the total foreign direct investments (FDI) in the first semester to its level in the same period last year.
Data from the Bangko Sentral ng Pilipinas (BSP) showed FDI surged to $674 million in June this year, up from the $238 million in the same month in 2016. The BSP said the 183-percent leap in long-term foreign investments is indicative of “continued bullish outlook on the Philippine, economy”.
The June FDI was also higher than the previous month’s $568 million.
The BSP said the increase in FDI inflows in June was due largely to the expansion of debt instruments, or the so-called intercompany borrowings from foreign direct investors by their subsidiaries or affiliates in the Philippines during the month.
Data show these debt instruments hit $674 million in June, up from the $454 million in the
previous month.
Meanwhile, inflow from reinvestments of earnings, which barely rose from $71 million in May to $72 million in June, was canceled out by the net withdrawals in equity capital investments, which was also at $72 million.
The outflow of FDI in the equity capital market during the month was due to the larger total withdrawals of $185 million, as compared to the total actual placements in June at $113 million.
These placements can be tracked mostly from investors from the United States, Japan, Taiwan, Singapore and India. Their investments were mainly channeled to real estate, electricity, gas, steam and air-conditioning supply, financial and insurance, manufacturing and professional, scientific and technical activities.
A month’s worth of stellar performance for the country’s FDI, however, was not enough to push the overall numbers of the country in the first half of the year.
Total FDI in January to June this year hit $3.6 billion, still 14 percent lower than the $4.2-billion FDI in the same six-month period last year.
All subindices of the country’s FDI in the first half of the year were lower than the previous year’s, except reinvestment of earnings, which grew 9 percent, and debt instruments, which grew 29.2 percent.
Earlier this year, the BSP said its expectations for FDIs turned more optimistic for 2017, as it now projects long-term foreign investment to hit $8 billion for the year, up from the $7-billion projection in its December assessment.