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Net Foreign Direct Investment Inflows for January-February 2007 Climb to US$633 Million

05.10.2007

Foreign direct investments (FDIs) registered a net inflow of US$551 million in February 2007.  This brought the two-month FDI level to US$633 million, significantly higher by 33.5 percent from US$474 million in the comparable period a year ago. 

FDI net inflows during the first two months of 2007 resulted from the more than twofold increase in net equity capital inflows to US$578 million.  This was traced, in turn, mainly to the acquisition in February 2007 by a foreign conglomerate of holdings of a local bottling company.  Other foreign direct investments were channeled to the following industries: manufacturing (chemical products, electronics), mining (mineral processing), services (international courier, information technology development), real estate, financial intermediation, agriculture, and construction.

Reinvested earnings for January-February 2007 at US$32 million were also five times higher than last year’s US$6 million on the back of higher retained earnings of foreign banks in their local branches.  Meanwhile, loans granted by head offices to their subsidiaries in the Philippines - accounting for the bulk of the other capital account - amounted to only US$23 million from US$260 million during the comparable period a year ago as some local subsidiaries repaid their loans from their mother companies abroad.

The major sources of FDI flows during the two-month period were the U.S., Japan and Singapore. 

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