BSP: First two mos. foreign direct investments up 154% to $850M

Foreign direct investment (FDI) soared 154 percent in the first two months of the year, encouraged by strong macroeconomic fundamentals, the Bangko Sentral ng Pilipinas (BSP) said Thursday.

FDIs reached $850 million in January to February, up $515 million from $335 million a year earlier, BSP Gov. Amando Tetangco Jr. noted in a statement

“The respectable growth of FDI reflected favorable investor sentiment as the country’s macroeconomic fundamentals remained strong amid continuing concerns over the sovereign debt crisis in some parts of Europe and the moderation in global economic activity,” said Tetangco.

Equity placements surged 1,317 percent to $893 million from $63 million in the same comparable period, and withdrawals rose 266.7 percent to $77 million from $21 million.

Equity capital came from the US, Australia, Japan, and Kuwait and were placed largely in the manufacturing, wholesale and retail trade, real estate, financial and insurance services, mining and quarrying, information and technology sectors, Tetangco pointed out.

However, other capital account, largely inter-company borrowings between foreign direct investors and their subsidiaries or affiliates in the Philippines, dropped by 111 percent to a net outflow of $24 million in the first two months from a net inflow of $243 million, the Bangko Sentral noted.

Reinvested earnings went up by 20 percent to $60 million from $50 million as foreign direct investors retained parts of their earnings in local enterprises.

In February alone, Tetangco noted FDI inflows fell 30.6 percent to $84 million from $121 million a year earlier as other capital account posted a net outflow of $21 million from a net inflow of $94 million.

Equity investments in February, however, surged 389 percent to $132 million from $27 million. Withdrawals jumped 244 percent to $55 million from $16 million.

Reinvested earnings surged 75 percent to $28 million from $16 million.

Tetangco said the bulk of inflows–or $100 million–represented final payment for the acquisition of shares by a foreign firm in a beverage manufacturer.

Kirin Holdings of Japan bought a 43-percent stake in diversified conglomerate San Miguel Corp. (SMC) in 2009 for $1.06 billion and spent another $300 million in 2010 to acquire an interest in San Miguel Brewing International Ltd.

New York-based Standard and Poor’s (S&P) recently raised the Philippines credit rating outlook to positive from stable, signaling a possible upgrade of the rating that is now two notches below investment grade.

Still, London-based Fitch Ratings rates the country’s sovereign credit at one notch below investment grade while Moody’s Investors Service and S&P rate the country’s sovereign credit at two notches below investment grade with a stable outlook. —VS, GMA News

 

Source: http://www.gmanetwork.com/news/story/257736/economy/business/bsp-first-two-mos-foreign-direct-investments-up-154-to-850m