Foreign direct investments (FDI) recorded a net inflow of US$170 million in December 2009, boosted by net intercompany loan availments of local utilities firms from their parent companies abroad. As a result, the full-year 2009 FDI level rose to US$1.9 billion, representing a year-on-year growth of 26.2 percent. According to Bangko Sentral ng Pilipinas Officer-in-Charge Diwa C. Guinigundo, the country continued to attract foreign investments in 2009 as investors recognized the relative strength of the country’s underlying macroeconomic fundamentals, with inflation continuing to be low and falling within target, the external payments position remaining favorable, and economic growth showing resilience amidst the strength in domestic demand.
Net equity capital flows in 2009 reached US$1.8 billion, nearly 50 percent higher than the year-ago level. Benefiting largely from equity infusions were the manufacturing, real estate, construction, services, financial intermediation, mining, trade/commerce, and the transportation/storage/communications sectors. The bulk of the investments came from the U.S., Japan, Hong Kong, and the Netherlands.
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$58 million. The level, however, was lower by almost 80 percent compared to that of the previous year mainly on account of higher trade credits extended by local subsidiaries/affiliates to their parent companies abroad.
The reinvested earnings account also recorded US$84 million net inflows in 2009 as foreign investors opted to plough back corporate earnings to local enterprises given clearer signs of global economic rebound.