Net foreign direct investments total $222M in July — BSP

Foreign direct investments in July 2010 yielded net inflows of $222 million, reflecting positive investor sentiment on the back of stronger growth momentum, expectations of manageable inflation for the rest of the year, and healthy external payments dynamics, the Bangko Sentral ng Pilipinas said Tuesday. Positive balances were recorded across all the categories of FDI during the month in review. Net inflows in July were largely driven by the other capital account, which totaled $186 million, or more than four times the mount recorded in the same month last year. Year-to-date, FDI net inflows in January-July 2010 reached $954 million, the central bank said in a statement. The biggest contribution to the net inflows also came from “other capital account" largely of borrowings from foreign direct investors by subsidiaries and affiliates in the Philippines. Net inflows in the other capital account amounting to $590 million were registered in the first seven months of 2010, a turnaround from $147 million in net outflows in the comparable period last year. Reinvested earnings also registered a cumulative net inflow of $223 million, markedly higher than the $15 million posted in the same period a year ago, the central bank said. Meanwhile, net equity capital flows in the first seven months of the year amounted to $141 million or 92.1 percent lower than the amount posted in the comparable 2009 period when direct investment inflows surged from that acquisition of a significant number of shares in a local beverage manufacturing firm and the privatization of a local power corporation. Gross equity capital placements also dropped to $345 million in January-July from $1.8 billion in the year earlier period, the central bank said. The US, Ireland, the Netherlands, Switzerland, Japan, and Singapore were the major sources of equity capital flows to the Philippines, according to the central bank. “These inflows were mostly channeled to the following sectors: banking, manufacturing (pharmaceutical products, semiconductors, health care products, and air conditioners and refrigerators), real estate, transport and storage, power generation, mining, and services (recreational and cultural)," the central bank said. — VS, GMANews.TV