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Net Inflows of Foreign Equity Capital in 2007 Reach US$2.0 Billion

03.10.2008

Net inflows of foreign equity capital reached US$2.0 billion in 2007, higher by 52.6 percent compared to the US$1.3 billion net inflows recorded in 2006.  In particular, gross equity capital placements expanded by 28.2 percent to US$2.2 billion during the year. These were channeled largely into manufacturing (electronics, health and chemical products, food, automotive sensor & safety products, decorative crafts and molded plastic products, cleaning products), services (international courier, information technology development, multimedia service provider), construction, mining, real estate, financial intermediation, and agricultural industries. The bulk of these inflows came from Japan, the U.S., the U.K., Germany, South Korea, Malaysia, and Hong Kong.  In December, equity capital infusion by foreign investors summed up to US$68 million from US$35 million in the same month a year ago.

The reinvested earnings account during the year also rose to US$567 million from US$485 million a year ago, as foreign direct investors continued to plough back a portion of their earnings into local enterprises/corporations. 

Meanwhile, the other capital account—which consists largely of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines—registered a lower net inflow of US$341 million compared to the net inflow of US$1.1 billion same period in 2006. This developed as local affiliates settled loans obtained from their parent companies abroad amounting to US$1.5 billion.

On an aggregate level, therefore, cumulative net inflows of FDI for 2007 reached US$2.9 billion. This was only US$7 million higher than the level posted in 2006 due largely to the repayment of intercompany loans. 

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