The country enjoyed a net inflow of foreign direct investments (FDI) last August, doubling from a year ago as foreign companies infused fresh capital and lent more money to affiliates based in one of Asia’s fastest-growing economies.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said the country saw $143 million in net inflows of FDI last August, or 123 percent more than the $64 million in the same month last year.
This brought the eight-month tally to $2.8 billion, or 25.4 percent more than a year ago and exceeding the $2.2 billion BSP forecast for the entire 2013.
FDI pertain to money invested by foreign companies in the Philippines to establish new businesses or expand existing ones, and as such creates jobs.
“The significant rise in foreign investments into the country reflects the positive outlook of investors on the Philippine economic prospects have been supported by sound macroeconomic fundamentals and a smoothly functioning financial system,” the BSP said.
The Philippines’ gross domestic product (GDP) grew 7.6 percent in the first six months of the year, one of the fastest in Asia. GDP is the amount of final goods and services in the country and as such measures economic performance.
The BSP said non-residents’ placements in debt instruments issued by local affiliates reversed to net inflows of $47 million in August from net outflows of $44 million a year ago.
This yielded a more than fivefold increase in non-resident firms’ lending to local affiliates to $41.7 billion. Parent companies abroad continued to lend to their local subsidiaries to fund existing operations and expansion of the businesses in the country.
Equity capital also yielded net inflows of $42 million, as gross placements of $91 million more than offset withdrawals of $49 million. This led to a 60 percent increase in the year-to-date figure to $2.1 billion.
Gross equity capital placements were channeled mainly to financial and insurance, real estate, manufacturing, human, health and social work, and information and communication activities. These investments came mostly from the United States, Singapore, the United Kingdom, Japan, and Germany.