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Foreign Direct Investments in the Philippines

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Foreign Direct Investments in the Philippines
« on: January 11, 2020, 09:26:51 AM »
FDI Records Higher Net Inflows in October 2019;
First Ten Months Level at US$5.8 Billion

Foreign direct investments (FDI) net inflows grew by 33.7 percent
to US$672 million in October 2019 from the US$502 million recorded
during the same period in 2018. This was mainly on account of the expansion
in non-residents' net investments in debt instruments issued by local affiliates
(intercompany borrowings) by 60 percent to US$534 million
(from US$334 million in 2018).

Meanwhile, net inflows of equity capital slowed down to US$58 million
(from US$98 million in October 2018), following the decline in equity capital
placements (to US$80 million from US$112 million) coupled with the increase in
withdrawals (to US$22 million from US$14 million). Equity capital infusions during
the month came mostly from the United States, South Korea, and Japan.

Placements during the period were invested largely in 1) real estate, 2) financial
and insurance, and 3) manufacturing industries. Reinvestment of earnings
amounted to US$79 million, 12.7 percent higher than the US$71 million recorded
in October 2018.

For the period January-October 2019, FDI net inflows reached
US$5.8 billion. This, however, was lower by 32.8 percent from the US$8.6 billion
posted in the same period in 2018. The lower FDI net inflows reflect subdued
investor sentiment due to the continued sluggish global economic activity.
Net investments in debt instruments decreased by 27.3 percent to US$4.3 billion
from the US$5.9 billion during the same period in 2018. Likewise, net equity
capital investments dropped by 65.4 percent as placements fell by 44.9 percent
to US$1.3 billion and withdrawals rose by 58.8 percent to US$629 million.

The top country sources of equity capital placements during the period
were Japan, the United States, Singapore, China, and South Korea. These were
channeled mainly to 1) financial and insurance, 2) real estate, and
3) manufacturing industries. Reinvestment of earnings rose by 12.5 percent to
US$825 million during the period.

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