Inflation may be near its highest in a decade and economic growth might be slowing, but foreign direct investments continue to flow into the country at a rapid clip, the latest data from the Bangko Sentral ng Pilipinas (BSP) revealed Monday.
In a press statement, the central bank said that long-term equity investments from overseas registered net inflows of $5.8 billion for the first semester of 2018, an increase of 42.4 percent from $4 billion last year.
“The continued inflows of FDI indicate investor confidence in the Philippine economy on the back of strong macroeconomic fundamentals and growth prospects,” the BSP said, explaining the recurring phenomenon this year of strong long-term investment despite adverse developments that have also pushed the peso to near 13-year lows.
During the period, non-residents’ net investments of equity capital grew more than seven times to reach $1.6 billion. This emanated mainly from the 244.1-percent surge in equity capital placements to $1.7 billion, alongside the 46.9 percent decrease in withdrawals to $163 million.
Equity capital infusions during the first semester were sourced primarily from Singapore, Hong Kong, China, Japan, and the US. These were invested mainly in manufacturing; financial and insurance; real estate; arts, entertainment and recreation; and electricity, gas, steam and air-conditioning supply activities.
The central bank said that higher investments in debt instruments were recorded also in the first half of the year amounting to $3.8 billion from $3.4 billion. Reinvestment of earnings rose to $420 million during the period.