Net inflows of foreign direct investments jumped 40.7 percent in the first half to $4.3 billion from $3.1 billion in the same period last year on sustained investors’ confidence in the economy, the Bangko Sentral ng Pilipinas said Friday.
“The higher cumulative FDI net inflows was due mainly to the 86.5-percent growth in non-residents’ net investments in debt instruments to $2.8 billion from $1.5 billion,” the BSP said in a statement.
Reinvestment of earnings rose 7.7 percent to $522 million in the six-month period from $484 million a year earlier. However, net investments in equity capital declined by 8.9 percent to $971 million from $1.1 billion during the same period.
The BSP said that in June, FDI net inflows surged 60.4 percent to a five-month high of $833 million from $519 million in the same month last year.
“FDI net inflows in June increased mainly on account of infusion by foreign direct investors to their subsidiaries/affiliates in the Philippines in the form of net investments in debt instruments, which rose year-on-year by 151.8 percent to $630 million,” the BSP said.
Reinvestment of earnings grew by 23.4 percent to $110 million from $89 million.
Meanwhile, non-residents’ net investments in equity capital declined 48.4 percent in June to $93 million from $180 million in the same month last year.
“This was due to the downturn in equity capital placements by 38.2 percent to $119 million from $192 million along with the increase in equity capital withdrawals by 112 percent to $26 million from $12 million,” the BSP said.
The BSP said concerns over the spread of more transmissible Delta variant may have prompted investors to remain on the sidelines. Equity capital placements during the month originated mostly from Japan, the United States and Singapore. These were invested largely in manufacturing real estate, and financial and insurance industries.
Net FDI inflows reached $6.5 billion last year. This year, the BSP expects net FDIs to hit $7.5 billion.