Foreign direct investments (FDI) continued to post net inflows in December 2008 amounting to US$89 million, with all FDI components recording positive balances. “Notwithstanding investors’ risk aversion, the country managed to post cumulative net FDI inflows in 2008 amounting to US$1.5 billion,” Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. said. The FDI net inflows for the month and year-to-date were lower than the comparable levels in the previous year by 3.3 percent and 47.9 percent, respectively.
Net equity capital flows in 2008 amounted to US$1.4 billion, or 30.7 percent lower than the year-ago level. The U.S., Japan, Singapore, South Korea, Germany, Malaysia, Taiwan, Hong Kong, United Kingdom, and the Netherlands were the major sources of equity capital flows. The bulk of these inflows were channeled 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 largely of intercompany borrowing/lending between foreign direct investors and their subsidiaries/ affiliates in the Philippines—also recorded net inflows amounting to US$261 million. The level, however, slipped by almost 25 percent compared to the previous year attributed mainly to the lower loan availments by Philippine subsidiaries from their mother companies as global economies continue to feel the financial squeeze and the slowdown in economic activity. Reinvested earnings, meanwhile, reversed to a net outflow of US$91 million due to losses realized by some foreign direct investment enterprises in the country in 2008.