Foreign Equity Capital Investments in Philippines Up in February

Bangko Sentral ng Pilipinas

MANILA, PHILIPPINES – Foreign net equity capital in the Philippines increased by 184.7 percent in February to US$179 million, sending the total foreign direct investments (FDI) rising by by 17.9 percent in the month, the Bangko Sentral ng Pilipinas (BSP) said.

Data released by the BSP, the country’s central bank, showed that (FDI) rose by 17.9 percent in February 2015 to reach US$359 million from US$305 million in the same period the previous year.

This was due largely to the 184.7 percent increase in net equity capital to US$179 million as gross equity capital placements expanded by 103.6 percent while withdrawals declined by 59.4 percent, the BSP added.

The bulk of these equity capital investments—emanating mainly from the United States, Spain, the United Kingdom, Japan and Singapore—was channeled primarily to manufacturing; electricity, gas, steam and air conditioning supply; financial and insurance; transportation and storage; and professional, scientific and technical activities.

Meanwhile, non-residents’ investments in debt instruments (or lending by parent companies abroad to their local affiliates to fund existing operations and business expansion) amounting to US$122 million were lower by 29.5 percent compared to the level registered in the same month in 2014.

Similarly, reinvestment of earnings decreased by 15.9 percent to US$58 million.

On a year-to-date basis, FDI net inflows reached US$622 million in the first two months of the year.

This, however, was 48.6 percent lower than the US$1.2 billion net inflows recorded in the same period last year as all FDI components posted lower net inflows.

Non-residents’ investments in debt instruments, which accounted largely for the decline, contracted by 61.8 percent (from US$757 million to US$289 million) due to lower debt availments during the period January-February 2015.

Net equity capital also declined by 22.4 percent (from US$264 million to US$205 million).

Equity capital investments during the period—which came mostly from the United States, Spain, Singapore, Japan and Germany—were channeled mainly to manufacturing; electricity, gas, steam and air conditioning supply; financial and insurance; real estate; and transportation and storage activities.

Meanwhile, reinvestment of earnings for the first two months of 2015 reached US$128 million, lower by 32.1 percent. –