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Net Inflows of Foreign Direct Investment Continue in November; January-November FDI Net Inflows at US$1.4B


Net inflows of foreign direct investments (FDI) amounting to US$82 million were posted in November 2009. The various categories of FDI registered net inflows, Bangko Sentral ng Pilipinas Officer-in-Charge Nestor A. Espenilla, Jr.  announced today.  Net inflows in the other capital account reached US$66 million due mainly to higher intercompany loan availments by subsidiaries from their parent companies abroad.  The manufacturing, services (business process outsourcing), and financial intermediation industries were the major beneficiaries of these intercompany loans.  Equity capital yielded US$8 million in net inflows, as investors remained cautious due to the slow pace of global economic recovery, even as the country’s underlying macroeconomic fundamentals remained sound.  Reinvested earnings stood at US$8 million during the same month.

On a cumulative basis, the eleven-month FDI level amounted to US$1.4 billion, higher by 5.5 percent than the year-ago level.  Net equity capital inflows, totaling nearly US$1.4 billion, were up by 12.8 percent compared to the US$1.2 billion level recorded in the same period in 2008.  In particular, gross equity capital placements from January to November 2009 reached US$1.5 billion, with the bulk of investments coming from the U.S., Japan, Hong Kong, and the Netherlands.  Recipient industries included manufacturing, real estate, construction, services, financial intermediation, mining, trade/commerce, and transportation/ storage/communications.

Reinvested earnings reversed to a net inflow of US$133 million from a net outflow of US$126 million during the same period a year ago, following stronger corporate earnings results in the first three quarters of 2009. 

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$91 million compared to the US$249 million net inflow in the same period in 2008.  This developed as a result of higher trade credits extended by local subsidiaries/affiliates to their parent companies abroad.

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