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Foreign Direct Investments Inflows Further Strengthen in October

01.10.2006

Net foreign direct investment (FDI) flows into the country in October expanded year-on-year by 100 percent to US$102 million. The surge in net FDI inflows during the month was traced to the reversal to net inflow of US$73 million in the “other capital” component of FDI, which is comprised of inter-company accounts between investee companies and their corresponding foreign direct investors.

This favorable development brought the total net FDI flows from January to October 2005 to US$863 million, up by 64.4 percent from the year-ago level of US$525 million. Higher net FDI inflows were in the form of equity capital which rose by 40.2 percent to reach US$959 million due to the twin effect of higher equity placements and lower withdrawals. Placements of new equity capital which aggregated to US$1.1 billion were channeled mainly to the manufacturing sector (US$503 million); real estate (US$100 million); and services (US$16 million), with the U.S. and Hong Kong as the major investor countries.

Also contributing to the positive performance of FDI during the ten-month period was the decline in the total net outflow in the “other capital” component of FDI to US$102 million from the year-ago level of US$291 million.

For the full year 2005, total net FDI inflows are projected to reach US$971 million with the expected equity capital placements in Philippine enterprises amounting to US$1.4 billion.

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