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Foreign Direct Investments Post US$1.3 Billion Net Inflows in January-September

12.10.2009

Foreign direct investments (FDI) for the first nine months of 2009 posted a net inflow of US$1.3 billion, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.  The cumulative level for the nine-month period was higher by 6.8 percent than the level recorded in the comparable period in 2008 on the back of stronger equity capital inflows and higher reinvested earnings. For the month of September 2009, however, investor appetite was relatively more subdued than in the previous months amid the still-weak global economic recovery.  This was reflected in modest placements of equity capital, which were more than offset by withdrawals from non-resident investors.  As a result, FDI in September yielded a small net outflow of US$6 million.

The net inflows of FDI during the nine-month period was due primarily to net equity capital infusion aggregating US$1.3 billion. Gross equity capital placements from January to September 2009 reached US$1.5 billion, representing a year-on-year growth of 20.6 percent.  Investments came from the U.S., Japan, Hong Kong and the Netherlands and were channeled to the manufacturing, real estate, construction, services, financial intermediation, mining, trade/commerce, and transport/storage/communications sectors.

Reinvested earnings in the first nine months also posted a net inflow of US$114 million, a rebound from the US$75 million net outflow in the same period a year ago as investors continued to retain profits/earnings in local enterprises.  Meanwhile, the other capital account (consisting mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines) recorded a net outflow of US$164 million from a US$219 million net inflow during the comparable period in 2008. The outflows were primarily attributed to intercompany loan repayments to foreign direct investors and higher trade credits extended to parent companies abroad.

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