Foreign direct investments (FDIs) posted net inflows amounting to US$31 million in October 2008, due mainly to equity capital infusion and reinvested earnings from non-resident investors. Net foreign exchange inflows in the ten months to October, which continued despite the weak global financial environment, brought the cumulative FDI level to US$1.4 billion. This level, however, was lower compared to the US$2.6 billion posted during the same period in 2007 as investment decisions were stalled by foreign investors’ concerns over the developments in financial markets, particularly in the weeks following the unfolding of the global financial crisis in late September.
Equity capital for the first ten months recorded net inflows of US$858 million, though lower by more than 50 percent than the level a year ago. Investments were infused by investors coming mainly from the U.S., Japan, Singapore, South Korea, Germany, Malaysia, Taiwan, Hong Kong, United Kingdom, and the Netherlands. These inflows were primarily infused to the following sectors: manufacturing (shipbuilding/repair, auto electronics parts/ components, paper/cigarette/tobacco products), services (recreational/cultural), mining, construction (hotel/resort/water spa development, power plant facility, global gateway and logistics hub), utilities, real estate, trade/commerce, and financial institutions.
The other capital account, consisting mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/ affiliates in the Philippines, also realized net inflows of US$186 million during the ten-month period, albeit lower than comparable period last year on account of lesser intercompany loan availments. On the other hand, reinvested earnings rose by more than 10 percent to US$374 million as foreign investors opted to retain earnings/profits in local banks.