DI inflows post double-digit growth in January-October

MANILA, Philippines – Foreign direct investment (FDI) inflows posted a double digit growth in the first 10 months of last year due to stronger equity capital inflows and higher reinvested earnings, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. reported yesterday.

Tetangco said FDI inflows jumped by 17.9 percent to $1.328 billion during the first 10 months of last year from a year-ago level of $1.126 billion as both equity capital and reinvested earnings recorded net inflows.

He pointed out that equity capital net inflows soared by 28.3 percent to $1.36 billion in the first 10 months of last year from $1.06 billion in the same period in 2008.

Data showed that equity capital placements jumped by 22.4 percent to $1.503 billion from $1.228 billion while withdrawals fell by 14.9 percent to $143 million from $168 million.

Tetangco said the bulk of the investments came from the US, Japan, Hong Kong, and the Netherlands.

He added that investments were made in the manufacturing, real estate, construction, services, financial intermediation, mining, trade or commerce as well as transportation, storage, and communications sectors.

The BSP chief also reported that reinvested earnings amounted to $125 million from January to October last year, a complete turnaround from the $131-million net outflow registered in the same period in 2008.

“Investors were encouraged to retain part of their earnings in local enterprises or corporations given the Philippine economy’s resilience amidst challenging global economic conditions,” Tetangco said.

Data also showed that other capital account including intercompany borrowing or lending between foreign direct investors and their subsidiaries or affiliates in the Philippines reversed to a net outflow of $157 million from a net inflow of $197 million. –Lawrence Agcaoili (The Philippine Star)