MANILA, Philippines - Foreign direct investments rose fourfold in April as the country’s strong macroeconomic fundamentals continue to attract investors, the Bangko Sentral ng Pilipinas reported yesterday.
Net FDI inflows amounted to $597 million in April, four times the $149 million recorded in same period a year ago, driven largely by inter-company borrowings or investments of foreign firms in papers issued by their local units.
Placements in debt instruments surged to $518 million during the month from $23 million last year, while reinvested earnings also climbed 26.2 percent to $80 million.
However, equity capital investments made by foreign firms in their Philippine units dropped 37.4 percent to $79 million in April as more withdrawals were made during the period.
These funds came largely from the US, Japan, Singapore, the United Kingdom, and Germany and were put into real estate; financial and insurance; accommodation and food service; and transportation and storage activities.
In the first four months of the year, net FDI inflows amounted to $2.449 billion, 9.1 percent higher than the $2.245 billion recorded in the same period last year.
“The sustained increase in net inflows continued to reflect strong investor confidence in the country’s solid macroeconomic fundamentals,” the BSP said.
The Philippine economy grew by a slower-than-expected 5.7 percent in the first quarter but government officials are optimistic the 6.5- to 7.5-percent full-year goal is still within reach.
Inflation has also remained within the three to five percent target range, and the country’s external profile remained robust with surpluses recorded in the balance of payments.
Inter-company borrowings during the four-month period rose 42 percent to $1.55 billion, while reinvested earnings went up 1.3 percent to $265 million.
Equity capital, however, fell 22 percent to $900 million as of April. The funds, which came primarily from the US, Hong Kong, Japan, Singapore and Taiwan, were invested in financial and insurance; real estate; manufacturing; wholesale and retail trade; and mining and quarrying activities.
Last year, net FDI inflows increased 20 percent to $3.86 billion, surpassing the central bank’s $2.1-billion target for 2013.