Net Inflows breach $1-B mark Foreign investments surge 52% in Q1

MANILA, Philippines - Foreign direct investments (FDI) breached the $1-billion mark in the first quarter, buoyed by the economy’s strong performance, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

FDI posted a net inflow of $1.293 billion in the first three months, up 52.1 percent from $850 million in the same period last year.

For March alone, net inflows surged 59 percent to $364 million. 

FDI is considered the best type of investment as it is more stable and thus, expected to boost job generation. A net inflow indicates more investments entered than left.

“The country’s sustained favorable economic performance as evidenced by 69 consecutive quarters of positive growth and growth prospects for the year ahead helped drive inflows,” the BSP said.

Growth, as measured by gross domestic product (GDP), accelerated to 6.9 percent in the first quarter, the fastest quarterly expansion since the first quarter of 2013.

Broken down, equity investments or inflows channeled by company head offices to their subsidiaries in the country accounted for the bulk of FDI inflow.

From January to March, equity placements were positive at $676 million, up nearly 54 percent year-on-year.

BSP said Hong Kong, Singapore, Spain, the Bahamas and Taiwan accounted for most of equity investments during the three-month period.

By sector, the bulk of equity capital went to the financial and insurance, construction, food and accommodation, real estate and manufacturing activities. 

Investor purchases of debt instruments accounted for the next big chunk of FDI. Investments on securities rose 50 percent to $617 million in the first quarter. 

The balance was in the form of reinvested earnings at $181 million, down 2.1 percent.