Foreign direct investment rises in Feb.

Foreign direct investment (FDI) to the Philippines rose for the first time this year in February.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said it registered net FDI inflows of $209 million in February, or 5 percent higher than $199 million a year ago. FDI pertains to money invested by non-residents in the Philippines for establishing new businesses or expanding existing ones, and as such generates employment.

For this year, the central bank expects net inflows of $1.8 billion.

The BSP said the bulk of the inflows in February emanated from the other capital account at $177 million, arising primarily from the repayment of trade credits extended earlier by Philippine subsidiaries/affiliates to parent companies abroad.

Equity capital and reinvested earnings also registered net inflows of $25 million and $7 million, respectively.

Equity capital inflows were channeled to the manufacturing, utilities, financial intermediation and real estate sectors, with investors coming mostly from the United States, Switzerland and Singapore, the BSP said.

The BSP said despite sound macroeconomic fundamentals, gross equity capital placements remained subdued at $50 million as investors adopted a wait-and-see stance prior to the May elections.

The February figure led net FDI inflows to reach $310 million in the first two months.

This, however, was 47.6 percent lower than the $592 million at-end February last year.

The other capital account rose 26.9 percent to $278 million because of the combined effects of net inter-company loan availments made by Philippine enterprises, and repayment of trade credits by foreign direct investors to their local subsidiaries/affiliates.

Reinvested earnings meanwhile reversed to a net inflow of $34 million from a $55 million net outflow a year ago.

Equity capital during the two-month period reversed to a net outflow of $2 million from the $428 million net inflows in the same period a year ago.

The BSP had said that the country enjoyed a huge inflow in January last year when the government privatized the National Transmission Corp. for $3.95 billion, with 25 percent of the winning bid due that period. –LAILANY P. GOMEZ REPORTER, Manila Times