Category : Press Release
Date : March 10, 2017
Agency : Bangko Sentral ng Pilipinas
Title : Foreign Direct Investments More Than Double in December 2016; Full-Year Level at US$7.9 Billion
Article : Foreign direct investments (FDI) net inflows amounted to US$669 million in December 2016, more than double the US$272 million recorded in the comparable period in 2015. 1,2 More than half (or US$415 million) of the net inflows during the month were non-resident affiliates’ net placements in debt instruments issued by resident affiliates (or intercompany borrowings). Net equity capital infusion reached US$206 million, as equity capital placements of US$294 million more than offset the US$88 million withdrawals. Equity capital placements came mostly from Hong Kong, Japan, the United States, Singapore, and Belgium. These were channeled mainly in arts, entertainment and recreation; financial and insurance; manufacturing; real estate; and professional, scientific and technical activities. Meanwhile, reinvestment of earnings amounted to US$47 million during the month.

For full-year 2016, net FDI inflows reached US$7.9 billion, registering a year-on-year growth of 40.7 percent. This resulted as all FDI components continued to register net inflows. FDI inflows remained robust, supported by strong investors’ confidence in the country’s solid macroeconomic fundamentals. Net availment of debt instruments rose by 68.6 percent to US$5.2 billion from US$3.1 billion in 2015. Moreover, equity capital investments posted net inflows of US$2 billion, 12.1 percent higher than the US$1.8 billion recorded last year. This resulted as placements of US$2.7 billion outweighed withdrawals of US$643 million. Equity capital placements originated mainly from Japan, Hong Kong, Singapore, the United States, and Taiwan, and was infused largely to financial and insurance; arts, entertainment and recreation; manufacturing; real estate; and construction activities. Reinvestment of earnings declined by 4.9 percent to US$710 million during the year.

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1 Based on the Balance of Payments and International Investment Position Manual, 6th edition (BPM6) which uses the asset and liability principle in the compilation of FDI statistics. Under the asset and liability principle, claims of non-resident direct investment enterprises from resident direct investors are presented as reverse investment under net incurrence of liabilities/non-residents’ investments in the Philippines (previously presented in the Balance of Payments Manual, 5th edition (BPM5) as negative entry under assets/residents’ investments abroad). Conversely, claims of resident direct investment enterprises from foreign direct investors are presented as reverse investment under net acquisition of financial assets/residents’ investments abroad (previously presented as negative entry under liabilities/non-residents’ investments in the Philippines).

2 BSP statistics on FDI cover actual investment inflows, which could be in the form of equity capital, reinvestment of earnings, and borrowings between affiliates. In contrast to investment data from other government sources, the BSP’s FDI data include investments where ownership by the foreign enterprise is at least 10 percent. Meanwhile, FDI data of Investment Promotion Agencies (IPAs) do not make use of the 10 percent threshold and include borrowings from foreign sources that are non-affiliates of the domestic company. Furthermore, the BSP’s FDI data are presented in net terms (i.e., equity capital placements less withdrawals), while the IPAs’ FDI do not account for equity withdrawals.

View Table - http://www.bsp.gov.ph/publications/tables/2017_03/news-03102017a1.htm