Foreign direct investments (FDI) posted a net inflow of US$101 million in January 2010. This level was, however, lower compared to the FDI flows of US$393 million a year ago. Non-residents’ intercompany loan availments and reinvested earnings contributed to the inflows for the month of January, indicating a continued favorable outlook for the global economy during the year, even as foreign investors maintained a cautious stance with the onset of the electoral exercise to be held in May 2010.
The other capital account—consisting largely of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines—recorded a higher positive balance of US$101 million during the month arising from intercompany loan availments from a foreign direct investor in the United States.
Reinvested earnings reversed to a net inflow of US$27 million, from the year-ago net outflow of US$35 million, reflecting the better-than-expected performance of local corporations in 2009.
On the other hand, equity capital recorded a net outflow of US$27 million, from the US$417 million net inflow posted in January 2009. The modest gross inflows during the month amounting to US$17 million came largely from the U.S. and were directed to the manufacturing, real estate, and financial intermediation sectors. It may be noted that the significantly large inflows recorded in January 2009 resulted from the privatization of a local power corporation.