Foreign direct investments (FDI) posted net inflows of US$64 million in June 2011. This developed as positive balances were recorded across all the major FDI categories during the month in review. The reinvested earnings and other capital accounts yielded net inflows of US$25 million and US$19 million, respectively. Meanwhile, net equity capital infusion amounted to US$20 million, 66.7 percent lower than the level posted during the comparable period in 2010.
As a result, net FDI inflows for the first half of 2011 aggregated US$779 million, higher by 16.4 percent than the US$669 million net inflows recorded in the same period a year ago. The respectable growth in FDI reflected favorable investor sentiment as the country's macroeconomic fundamentals remained strong, amid a backdrop of a moderating and uneven global economic outlook.
Net inflows of equity capital rose by 82.1 percent to US$193 million in January - June 2011 from US$106 million in the comparable period last year. In particular, gross equity capital placements reached US$244 million, with the bulk of investments coming from the United States, Japan, Hong Kong, Singapore, and the Netherlands. The real estate, manufacturing, mining and quarrying, financial and insurance activities, utilities, and wholesale and retail trade sectors were the major beneficiaries of these equity capital placements.
Meanwhile, the reinvested earnings account during the first semester yielded net inflows of US$223 million, representing the return on foreign direct investors' investments that were subsequently retained in the domestic economy.
The other capital account, consisting mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines, posted a net inflow of US$363 million. The increase of 9.7 percent over the US$331 million net inflow in the comparable period last year was due primarily to higher trade credits extended to local subsidiaries by their parent companies abroad.