FDIs grow 15% to $741M in first five mos. – BSP

Foreign direct investments (FDI) into the Philippines climbed 15.3 percent in the first five months of the year helped by a favorable economic outlook, slower inflation and government's improving fiscal position, the Bangko Sentral ng Pilipinas (BSP) reported Wednesday. FDI inflows totaled $714 million in January to May, up $95 million from $619 million a year earlier, BSP Governor Amando Tetangco Jr. said in a statement. "The country continued to be a recipient of foreign funds despite the fragile multi-speed global growth, given the encouraging macroeconomic environment," Tetangco said. While equity placements dropped by 9.1 percent to $209 million from $230 million year-on-year, the amount of equity withdrawn plunged by 71.2 percent to $53 million from $184 million, the central bank chief noted. The bulk of investments came from the US, Japan, Hong Kong, Singapore, and the Netherlands, he said. Real estate, manufacturing, mining, utilities, wholesale and retail trade and construction benefited from the investment flows, Tetangco added. The BSP reported that inter-company borrowings between foreign direct investors and their subsidiaries or affiliates in the Philippines rose by 2.6 percent to $360 million $351 million, with foreign enterprises keeping their earnings in local corporations in the belief business sentiment continued to improve. Higher trade credits Reinvested earnings, however, fell by 10.8 percent to $198 million from $222 million as Philippine-based subsidiaries received higher trade credits extended by their overseas-based parent companies. In May alone, the BSP said net FDI inflows surged 623 percent to $162 million from a net outflow of $31 million a year earlier. "All FDI components posted positive balances during the month, reflecting favorable investor sentiment on account of the country's strong macroeconomic fundamentals such as improving fiscal situation, benign inflation, and relatively stable banking sector," Tetangco said. Because of improving fiscal position and strong balance of payments position, the Philippines received a series of credit rating upgrades from Standard & Poor's, Moody's Investors Service, and Fitch Ratings. Fitch rated Philippine sovereign credit a notch below investment grade while Moody's and S&P rated the country's sovereign credit at two notches below investment grade with a stable outlook. — VS, GMA News