ASEAN KEY DESTINATIONS
Philippine FDI surges
Foreign direct investments (FDI) to the country surged in November on the back of improved risk appetite for emerging Asia's assets, the Bangko Sentral ng Pilipinas (BSP) said Thursday.
In a statement, the BSP said it registered net FDI inflows of $304 million in November 2010 or more than threefold the $92 million net inflows in the same month of 2009.
"The continued risk appetite was coupled with the brighter outlook on the Philippine economy which helped boost the flow of capital into the country," BSP Governor Amando Tetangco Jr. said. The robust growth of FDI in November was driven by the rebound in equity capital net inflows of $274 million from $8 million in the same period in 2009 owing to the sizeable investment by two Japanese firms in a local mining corporation.
This compensated for the lower reinvested earnings and other capital, which settled at $4 million and $26 million, respectively, for a decline of 77.8 percent and 60.6 percent year-on-year.
Despite last November's surge, the 11-month cumulative FDI net inflows of $1.4 billion were 22.7 percent lower than the $1.8 billion recorded in same period in 2009.
The lower cumulative levels were blamed on investor concerns over the sovereign debt crisis in some parts of Europe, rising inflation in China, tensions in Korea and the subdued economic prospects of the US.
Net inflows of equity capital amounting to $477 million were markedly lower than the previous year's $1.8 billion.
Investments came primarily from the US, Japan, Ireland, Hong Kong, Singapore, the Netherlands and Switzerland, and were channeled tothe banking, real estate, manufacturing, and power generation sectors among others.
The other capital account, consisting mainly of inter-company borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippine, recovered last year with net inflows of $634 million.
Reinvested earnings also inched up at end-November to reach $263 million or fourfold the $62 million level in 2009.
FDI pertains to money invested by foreigners in the Philippines for establishing new businesses or expanding existing ones, and as such generates employment.
For 2010, the central bank revised its inflows projection to $2 billion from $1.8 billion earlier on the back of the government's public-private partnership initiative.
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