Foreign direct investments remain down in June

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Metro Manila (CNN Philippines, September 10) — Foreign direct investments (FDI) inflows continued to slow down in June, falling by 49 percent to $430 million from $836 million in the same period last year, the Bangko Sentral ng Pilipinas (BSP) reported Tuesday.

This was a marked improvement from the 85.1 percent FDI slump in May.

The central bank said investments in debt instruments, or capital extended by foreign companies to their local affiliates, slipped to $317 million during the month from $570 million in the same period of 2018.

Equity capital also plunged to just $25 million from $184 million year-on-year.

On the other hand, reinvested earnings, or profits secured by global companies which they chose to retain for their local units, grew by 8.3 percent to $89 million from $82 million in June 2018.

Equity capital placements in June came mostly from Singapore, the United States, Japan, the Netherlands and China, according to the BSP.

The central bank said equity inflows went to real estate; manufacturing; financial and insurance; electricity, gas, steam and air conditioning supply; and transportation and storage industries.

Meanwhile, FDI inflows during the first half fell by 38.8 percent to $3.6 billion from $5.8 billion in the same period last year.

The BSP attributed the shortfall to lower net equity capital investments, which dropped to just $361 million from $1.6 billion, and capital placements, which fell 50.8 percent to $860 million from $1.7 billion.

Withdrawals, however, jumped 207 percent to $499 million from $163 million.

Equity capital placements during the first half largely came from Japan, the United States, Singapore, China and South Korea. The hottest industries during the period were financial and insurance; real estate; manufacturing; transportation and storage; and administrative and support service.

Investments in debt instruments during the six-month period were also lower at $2.7 billion from $3.8 billion year-on-year, while reinvested inflows climbed 12.1 percent to $507 million from $453 million.

The central bank eyes $10.2 billion FDIs this year, coming from 2018's $9.802-billion haul.