Friday, February 12, 2016

Foreign Direct Investments post 16.4 percent growth in November 2015; First eleven months level at US$5.5 billion




From the Website of GPH - Government of the Philippines
links: http://president.gov.ph/news/foreign-direct-investments-post-16-4-percent-growth-in-november-2015-first-eleven-months-level-at-us5-5-billion/

Foreign Direct Investments post 16.4 percent growth in November 2015; First eleven months level at US$5.5 billion
February 11, 2016

Foreign direct investments (FDI) registered net inflows of US$464 million in November 2015, higher by 16.4 percent than the year-ago level.1,2 The robust FDI net inflows during the month was underpinned by sustained investor confidence on the economy on the back of the country’s sound macroeconomic fundamentals. All major components recorded increases from the previous year’s levels. Contributing largely to the growth in FDI net inflows was the 26.6 percent expansion of net placements by parent companies abroad in debt instruments issued by local affiliates (or intercompany borrowings) to US$187 million from US$148 million last year. Net placements in equity capital likewise rose by 11.2 percent to US$224 million from US$201 million in the previous year. This developed as equity capital placements amounting to US$234 million more than offset equity capital withdrawals of US$10 million. The bulk of equity capital placements came from the Netherlands, the Republic of Korea, Hong Kong, Singapore, and the United States. By economic activity, equity capital investments were channeled mainly to manufacturing; financial and insurance; real estate; wholesale and retail trade; and information and communication activities. Meanwhile, reinvestment of earnings increased by 7.5 percent to US$53 million.

On a year-to-date basis, FDI posted net inflows of US$5.5 billion for the period January to November 2015, albeit 3.4 percent lower than the US$5.6 billion net inflows recorded in the same period a year ago. This was mainly on account of the 9.9 percent decline in net placements in debt instruments to US$3 billion compared to US$3.3 billion a year ago. Reinvestment of earnings also fell by 9.7 percent to US$691 million. Meanwhile, net inflows of equity capital expanded by 13.5 percent due to the 25.6 percent increase in equity capital placements to US$2.6 billion, which outweighed equity capital withdrawals of US$807 million. The bulk of equity capital investments during the period—emanating largely from the United States, the Netherlands, Japan, the United Kingdom and Singapore—were channeled mainly to manufacturing; financial and insurance; real estate; wholesale and retail trade; and construction activities.

Based on the Balance of Payments and International Investment Position Manual, 6th edition (BPM6) which uses the asset and liability principle in the compilation of FDI statistics. Under the asset and liability principle, claims of non-resident direct investment enterprises from resident direct investors are presented as reverse investment under net incurrence of liabilities/non-residents’ investments in the Philippines (previously presented in the Balance of Payments Manual, 5th edition (BPM5) as negative entry under assets/residents’ investments abroad). Conversely, claims of resident direct investment enterprises from foreign direct investors are presented as reverse investment under net acquisition of financial assets/residents’ investments abroad (previously presented as negative entry under liabilities/non-residents’ investments in the Philippines).

BSP statistics on FDI covers actual investment inflows, which could be in the form of equity capital, reinvestment of earnings, and borrowings between affiliates. In contrast to investment data from other government sources, the BSP’s FDI data include investments where ownership by the foreign enterprise is at least 10 percent. Meanwhile, FDI data of Investment Promotion Agencies (IPAs) do not make use of the 10 percent threshold and include borrowings from foreign sources that are non-affiliates of the domestic company. 
Furthermore, the BSP’s FDI data are presented in net terms
(i.e., equity capital placements less withdrawals), while the IPAs’ FDI do not account for equity withdrawals.

source: http://www.bsp.gov.ph

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