FDIs approved in 2011 a 15-year high, says NSCB

Foreign direct investments approved by the country's six investment promotion agencies (IPAs) last year zoomed to P256.1 billion and exceeded the P241.1 billion set 15 years ago in 1997, the National Statistical Coordination Board (NSCB) said on Monday   The Bangko Sentral ng Pilipinas (BSP), on the other hand, reported that FDIs that actually flowed into the financial system in 2011 hit $1.3 billion.   The NSCB pointed out that FDIs in the last three months of 2011 was the highest in 15 years. “The amount is the highest quarterly FDI turn out ever since the government started compiling consolidated approved FDIs,” FDI data compiling commenced in 1996.   Approved FDIs in fourth quarter (Q4) 2011 got a 42.2-percent boost or P165.8 billion from P116.6 billion in Q4 2010.   “Foreign and Filipino ventures approved by the six IPAs for the fourth quarter of 2011 are expected to create 53,585 jobs, increasing by 40.6 percent from previous year’s projected employment of 38,101 jobs. Out of these anticipated jobs, 78.2 percent or 41,920 jobs would come from projects with foreign interest."   Most of the Q4 FDIs — 54 percent or P89.5 billion — were poured into manufacturing firms.   “Real estate activities came in second with investment pledges valued at P47.6 billion, contributing 28.7 percent, followed by electricity, gas, steam and air conditioning supply at P20.4 billion or 12.3 percent share,” the NSCB said.   NSCB defines FDIs as long-term investments “made to acquire a lasting interest by a resident entity in one economy in an enterprise resident in another economy. The purpose of the investor is to have a significant influence, an effective voice in the management of the enterprise.”   By this definition, a direct investment enterprise is “an incorporated or unincorporated enterprise in which a direct investor who is resident in another economy owns ten percent or more of the ordinary shares or voting power (for incorporated enterprise) or the equivalent (for an unincorporated enterprise).”   Latest BSP data showed a reversal of fortunes resulted in the 2011 FDI net inflows of $1.3 billion.   “In particular, equity capital reversed to a net inflow amounting to $513 million compared to the net outflow of $396 million recorded for the entire 2010, due largely to the reacquisition of a sizeable amount of shares of stock by a foreign firm in a local telecommunications company,” the BSP said.   Investors from Japan, the United States, Singapore, Republic of Korea and Hong Kong were top sources of FDIs.   Main objects of interest were the sectors of telecommunications, real estate, mining and quarrying, wholesale and retail trade, and manufacturing (semiconductors, power boilers/generators, motorcycles, and wiring harnesses/automotive components).   “Reinvested earnings in 2011 rose to S$365 million, twice the level recorded in 2010. This developed as foreign investors retained a larger amount of profits in domestic firms given the country’s favorable macroeconomic fundamentals and growth prospects,” the BSP said. — Earl Rosero/VS, GMA News