Long-term capital inflows to the Philippines surged in July, continuing a recovery in investment in the country this year after last year’s downbeat numbers due to the onset of the coronavirus pandemic, central bank data shows. .
In a statement, the Bangko Sentral ng Pilipinas (BSP) said net foreign direct investment (FDI) inflows increased by 52% to $1.3 billion in July 2021, compared to net inflows of 831 million recorded in July 2020.
This improvement brought cumulative net inflows of long-term capital to $5.6 billion, up 43.1% from net inflows of $3.9 billion in the first seven months of 2020.
“This is mainly explained by the 78.7% expansion of nonresidents’ net investment in debt instruments to $3.9 billion from $2.2 billion,” the central bank said.
Similarly, earnings reinvestment reached $677 million, up 19.3% from the $567 million recorded a year ago. However, net nonresident equity investment, other than reinvestment of earnings, fell 12.4% to $1 billion from $1.1 billion in the comparable period last year. 61.1% growth in investmentsThe central bank said the increase in net FDI inflows in July 2021 was mainly due to the 61.1% year-on-year growth in investments in debt instruments at $1.1 billion versus $667 million. Similarly, earnings reinvestment increased by 87.1%, from $83 million to $155 million.
Meanwhile, net non-resident equity investment contracted 58.3% to $34 million in July 2021 from $81 million in the comparable month in 2020. This expanded then that the increase in equity outflows of 634.7% to $57 million from $8 million more than offset the increase in equity investments of 2.6% to $91 million from $89 million .
The bulk of equity investment during the month came from Japan, the United States and Hong Kong. These investments were channeled mainly into the manufacturing, real estate, finance and insurance sectors.
Year-to-date, net equity investments decreased 12.4% due to investments falling 9.5% to $1.2 billion from $1.4 billion and the 6% increase in withdrawals to $223 million from $210 million.
Equity investments came largely from Singapore, Japan and the United States. These have been infused mainly in the manufacturing, financial and insurance industries, as well as in the electricity, gas, steam and air conditioning sectors. INQ
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