FDI down in April on sluggish US growth, eurozone debt

ABS-CBN News

Posted at Jul 12 2011 03:42 PM | Updated as of Jul 13 2011 03:57 AM

MANILA, Philippines - Net foreign direct investment (FDI) fell 4.7% in April from a year ago to $81 million, mainly on account of sluggish growth of the US and Japan, the central bank said Tuesday.

The April figure, the lowest in six months, brought the total for the January to April period to $552 million, down 15% year on year.

The Bangko Sentral ng Pilipinas (BSP) said in a statement that aside from slow growth experienced by advanced economies, heightened uncertainties resulting from the eurozone debt crisis and the social unrest in the Middle East and North Africa region weighed on investor sentiment.

"The country, however, continued to be a recipient of foreign funds on account of its strong macroeconomic fundamentals and favorable growth prospects," the BSP said.

Equity capital registered a net inflow of $20 million in April, the second slowest month this year after February's $10 million. Net equity capital inflows in January to April reached $101 million, almost flat from a year earlier.

Bulk of the investments originated from the US, Singapore, Hong Kong, Japan and the Netherlands.

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

BSP Governor Amando Tetangco Jr. had said the country was on track to meet the central bank's forecast of a BOP surplus of $6.7 billion this year, adding a strong external payments position should provide support to the
peso and help mitigate imported inflation.

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