January FDI highest since May 2007

ABS-CBNnews.com, Reuters

Posted at Apr 12 2012 07:51 PM | Updated as of Apr 13 2012 03:21 PM

MANILA, Philippines - Net foreign direct investment (FDI) inflow in January amounted to $766 million, the highest in nearly five years.

The January figure compared with only $43 million net FDI in December 2011. It was the largest since May 2006, when it also totalled $766 million.

In a statement, the Bangko Sentral ng Pilipinas said the inflow arose mainly from the final tranche of the agreement for the acquisition of shares of stock by a foreign firm in a local beverage manufacturing company, which it did not identify.

Positive domestic economic developments, including strong external payments and favorable corporate earnings in 2011, helped boost investor sentiment, the central bank added.

Net equity capital inflows of $739 million in January was significantly higher than the $31 million net inflow in the same month the previous year.

The bulk of the investments originated from the United States, Australia, Kuwait and Canada.

The manufacturing, mining, real estate, wholesale and retail trade, financial and insurance sectors benefited from the investments.

Net FDI, portfolio inflows and remittances from Filipinos working and living overseas help keep the country's balance of payments (BOP) in surplus.

The Philippines had its first monthly portfolio outflow in more than two-and-a-half years in February after investors sold local shares and government securities to take profit on worries about Greece's ability to restructure its debt.

The Philippines recorded a BOP surplus of $10.18 billion in 2011, above official estimates. The surplus was expected to narrow to $2.8 billion, or 1.1% of GDP, this year.

The Philippines posted a record BOP surplus of $14.4 billion in 2010, boosted by strong portfolio inflows.