ASEAN KEY DESTINATIONS
Philippines FDI surges in August
In a statement, the Bangko Sentral ng Pilipinas (BSP) said net inflows in August reached $80 million, or eight times higher than the $10 million in the same month last year. Despite the surge, net inflows in the January to August period fell 38 percent to $1.27 billion from last year's $1.657 billion.
The BSP said the decline in net equity capital inflows more than offset the growth in reinvested earnings and other capital investments. BSP Governor Amando Tetangco Jr. attributed the robust August number to positive economic developments, including the growth in the country's gross domestic product of 7.9 percent in the second quarter.
Reports of higher corporate earnings for the first half of the year also perked up investors' sentiment.
The central bank noted inflows in all FDI components for the month under review.
Equity capital yielded $66 million net inflows, representing a 187 percent increase from a year ago, with the majority of investors coming from the US and Japan.
The major recipients of these inflows were the real estate, mining, and information and communications sectors.
Reinvested earnings and other capital investments also posted net inflows of $5 million and $9 million, respectively.
Gross equity capital placements for the eight-month period reached $412 million, or 78.3 percent lower than the $1.9 billion recorded last year owing to big-ticket investments from the privatization of a local power corporation and the acquisition of a number of shares of a local beverage manufacturing firm.
Reinvested earnings rose to $221 million from $18 million in the same eight-month period last year, as investors opted to retain part of their earnings in local enterprises/corporations on the back of improvements seen in economic and corporate fundamentals.
The balance of the other capital account-consisting mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines-posted net inflows of $599 million compared with $163-million net outflows in the same period last year.
Tetangco said most of the inflows were attributed to higher trade credits extended to Philippine-based subsidiaries/affiliates by their parent companies abroad.
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 projects FDI to reach $2 billion from an earlier forecast of $1.8 billion.
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