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Foreign Direct Investments Post Strong Start in 2007; January Net Inflows Reach US$357 Million

04.10.2007

Foreign direct investments (FDIs) in January 2007 recorded net inflows of US$357 million, or a year-on-year growth of almost 51 percent.  The growth in FDI for the month was boosted mainly by the net inflows from the reinvested earnings account which amounted to US$220 million, from only US$2 million last year, as foreign banks opted to retain their earnings in their local branches given the continued positive economic prospects.

Net equity capital inflows also rose by almost 70 percent in January to US$70 million compared to the year-ago level, with fresh capital infusion in long-term investments reaching US$129 million.  In particular, the industries which benefited most from these inflows included: manufacturing (chemical products, electronics), services (international courier), real estate, financial intermediation, and construction.  Loans extended by head offices to their subsidiaries in the Philippines - comprising bulk of the other capital account - also registered a net inflow of US$67 million.

FDI flows are expected to remain positive in 2007 with investors taking advantage of the country’s improving investment climate.  The major sources of FDI flows in January were the U.S. and Japan.

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