Philippine foreign direct investment climbs 24.9 per cent in August

Net foreign direct investment entering the Philippines reached US$690 million in August, a 24.9 per cent annual increase, according to preliminary figures from the Bangko Sentral ng Pilipinas (BSP). Larger equity investments and reinvested profits outweighed a fall in intercompany borrowing.

August's inflows compared with US$552 million a year earlier and were almost level with July's US$689 million. However, the January-August tally stood at US$4.77 billion, down 19.2 per cent against US$5.9 billion a year before.

Profits retained in Philippine operations rose to US$365 million in August from US$243 million, an increase of 50.2 per cent. Equity investment on a net basis, excluding those earnings, increased 29.5 per cent, reaching US$189 million against US$146 million.

Fresh equity contributions amounted to US$254 million, up from US$158 million, while investors withdrew US$65 million, compared with US$13 million previously. Net debt-instrument investment slipped 16.7 per cent, from US$164 million to US$136 million.

Over January-August, debt-instrument investment dropped to US$2.57 billion from US$3.66 billion, a 30 per cent decrease. The BSP linked that reduction to lower net borrowing between Philippine companies and their foreign direct investors.

For the eight months, equity investment excluding reinvested profits was nearly flat: US$870 million against US$871 million. Gross placements decreased from US$1.37 billion to US$1.19 billion, while withdrawals fell from US$494 million to US$314 million. The BSP identified Japan, the United States and Singapore as the leading origins of equity capital, with manufacturing, finance and insurance, and real estate attracting most placements.