Philippine FDI inflows fall 44.1 per cent in July

The Philippines received US$689 million in net foreign direct investment in July, compared with US$1.23 billion a year earlier, preliminary Bangko Sentral ng Pilipinas (BSP) figures showed. The annual decline was 44.1 per cent, although inflows increased 54.1 per cent from June’s US$447 million.

Lower equity investment and reduced borrowing between foreign investors and their Philippine businesses drove the annual fall. An increase in profits retained in local operations was insufficient to offset those declines.

July’s net debt-instrument investment contracted 49.1 per cent to US$365 million from US$717 million. Net equity investment, excluding reinvested profits, decreased 55.5 per cent to US$186 million from US$418 million.

Fresh equity contributions amounted to US$199 million, against US$460 million a year earlier, while withdrawals declined to US$13 million from US$42 million. Reinvested earnings moved in the opposite direction, increasing 39.9 per cent to US$138 million from US$99 million.

For January–July, net FDI stood at US$4.07 billion, a 23.9 per cent reduction from US$5.35 billion in the corresponding period a year earlier. The BSP attributed the decrease to lower inflows in every major component.

Debt instruments remained the largest component over the seven months, but net investment fell 30.6 per cent to US$2.43 billion from US$3.5 billion. Reinvested earnings declined 14.2 per cent to US$968 million from US$1.13 billion, and net equity investment excluding those earnings dropped 6.9 per cent to US$675 million from US$725 million.

Japan, the United States and Singapore were the main origins of equity placements during January–July, the BSP said. Manufacturing, finance and insurance, and real estate accounted for most of the destinations for those funds.