June FDI alone rose by 16% to a net inflow of $73 million from a year earlier, bringing the first half tally to a net $917 million, up 10.6% from $829 million in the same period a year ago.
Net reinvested earnings were also positive at a net inflow of $74 billion, albeit 57% lower than a year earlier.
But "other capital," which consists of intercompany borrowing or lending between foreign firms and their subsidiaries or affiliates in the Philippines, swung to a net outflow of $227 million from a net inflow of $397 million last year.
"The turnaround in the other capital account was due to the settlement of trade credits extended to local companies by their foreign affiliates and the availment of trade credits by foreign companies from their local affiliates," the BSP explained.
For June alone, equity capital surged by 290% to a net inflow of $78 million as a large infusion was made by a foreign firm to its domestic holding company in order to purchase more shares of a local manufacturer, the BSP said without naming the firms involved.
"The bulk of investments coming from the Netherlands, the United States, Japan, Germany and Singapore were channeled mainly to manufacturing, real estate, mining and quarrying sectors; wholesale and retail trade; and accommodation and food service activities," it noted.
In 2011, net FDI amounted to $1.262 billion, slightly below the previous year’s $1.298 billion. The BSP expects a further drop this year to a net $1.2 billion.
Asked if this year’s outlook may be revised given the latest data, central bank Deputy Governor Diwa C. Guinigundo reiterated that a scheduled review would push through next month.
"Forecasts for all BoP (balance of payments) accounts will be reviewed," he said in a text message.
BY KATHLEEN A. MARTIN, Reporter BW Online
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