MANILA, Philippines – According to a report yesterday by the Bangko Sentral ng Pilipinas (BSP), the foreign direct investment (FDI) net inflow hit a high record of 10.05 billion US dollars last year following the positive sentiment of investors in the midst of the Philippines’ healthy macroeconomic prospects.
In data released by the central bank, FDI net inflow for 2017 reached 10.05 billion dollars which is higher by 21.4 percent than 2016’s record of 8.28 billion dollars.
It also surpassed the 2017’s full-year target of 8 billion US dollars set earlier by the BSP.
The BSP said that investors continuously perceive the Philippines as a good destination of their investment as a result of the healthy macroeconomic fundamentals of the country and its development prospects.
The country’s economy grew by 6.6 percent in the fourth quarter last year, resulting in 2017’s full-year progress of 6.7 percent. Economic managers foresee this year’s economic growth to reach between 7 and 8 percent.
The central bank said last year that all major foreign direct investment components recorded growth throughout the period.
Particularly, net equity capital investments increased by 25.9 percent from 2016’s 2.59 billion US dollars to 3.26 billion dollars in 2017. This occurred as total placements, reaching 3.74 billion dollars, outperformed withdrawals which recorded only 479 million dollars.
According to the BSP, equity capital placements came primarily from the Netherlands, Singapore, the United States, Japan, and Hong Kong.
Per sector, equity placements were invested in manufacturing; steam, gas, and air-conditioning supply; real estate; retail and wholesale trade activities; and construction.
At the same time, BSP mentioned that the debt instrument net profit composed primarily of intercompany lending or borrowing among foreign investors and their divisions hit 6.01 billion dollars which is 20.7 percent higher than 2016’s record of 4.98 billion dollars.
Likewise, earning reinvestments grew by 9.3 percent compared to previous years from 710 million dollars to 776 million dollars.
The FDI net inflow for December alone last year, on the contrary, dropped by 9 percent from 768 million dollars in December 2016 to 699 million dollars, as stated by the BSP.
This was associated by the BSP to the decrease in net investments in debt instruments, which was slashed over half to 335 million dollars throughout the period.
Net equity capital placements dropped a bit by 0.4 percent to 305 million dollars, coming from Singapore, the Netherlands, Japan, the United States, and Luxembourg, invested in manufacturing; arts, entertainment, and recreation activities; real estate; information and communication; and wholesale and retail trade.
In the meantime, earning reinvestments increased by 24.1 percent to 59 million dollars throughout the month.
Inflows collected from FDIs, exports, remittances, tourism receipts, and the BPO sector aid in establishing the gross international reserves (GIR) of the Philippines which serve as barrier averse to external shock.
The BSP foresees the FDI to reach 8.2 billion dollars for 2018, higher than the target of 8 billion dollars in 2017.