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Net Inflows of Foreign Direct Investments Continue in April 2011

07.12.2011

Foreign direct investments (FDI) recorded net inflows of US$81 million in April 2011. Positive balances were recorded across all the major categories of FDI during the month in review. The reinvested earnings and other capital accounts yielded net inflows of US$55 million and US$6 million, respectively. Meanwhile, net equity capital infusion amounted to US$20 million, 64.9 percent lower than the level posted during the comparable period in 2010.

Net FDI inflows in the first four months of 2011 amounted to US$552 million, lower by 15.1 percent from the same period in 2010 owing to generally sluggish growth in advanced economies, particularly Japan and the United States, and the prevailing cautious investor sentiment amid heightened uncertainties, as a result of the eurozone sovereign debt crisis in some parts of Europe and the social unrest in the Middle East and North Africa region. The country, however, continued to be a recipient of foreign funds on account of its strong macroeconomic fundamentals and favorable growth prospects. Net equity capital inflows from January to April 2011 of US$101 million were slightly lower by 1.0 percent than those of the previous year. Gross equity capital placements, in particular, amounted to US$150 million compared to the US$197 million inflows recorded in the same period a year ago. Investors came largely from the U.S., Singapore, Hong Kong, Japan, and the Netherlands. The real estate, mining, manufacturing, wholesale and retail trade, utilities, and construction sectors were the major beneficiaries of these equity capital placements.

The other capital account-which consists largely of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines-also registered a net inflow of US$283 million in the first four months of 2011, although lower relative to the US$357 million net inflows in the same period last year. This was due mainly to lower net loan availments by local subsidiaries from their foreign/parent companies. Meanwhile, reinvested earnings in the review period amounted to US$168 million, lower than the US$191 million posted in the previous year. 

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