Foreign direct investments (FDI) for the first quarter of 2010 recorded net inflows of US$396 million, nearly 19 percent higher than the year-ago level. Net inflows were registered across all FDI components during the review quarter. In March 2010, FDI posted net inflows of US$14 million, a reversal of the US$258 million net outflows recorded in March last year.
The bulk of the FDI net inflows for the period January-March 2010 were recorded in the other capital account which recorded net inflows of US$319 million in contrast to the US$48 million net outflows recorded a year ago. These consisted primarily of intercompany loans availed of by local subsidiaries from their parent companies abroad, which benefited primarily the services (business process outsourcing) and utilities sectors.
Equity capital in the first three months of the year also yielded net inflows of US$45 million. This was, however, lower by 90 percent compared to the year-ago level, as investors remained risk averse on concerns about the sovereign debt problems in the Euro Zone. Specifically, gross equity capital placements amounting to US$131 million were lower than those of the previous year, which totaled US$471 million. Investors came mainly from the U.S., Switzerland, Japan, Netherlands, and Singapore. The manufacturing, utilities, services, financial intermediation, and real estate sectors were the recipients of these equity capital inflows.
Reinvested earnings reversed to a net inflow of US$32 million, from a net outflow of US$78 million in the previous year. This reflected the positive corporate earnings results during the first three months of 2010 that encouraged investors to retain earnings/profits in local enterprises.