051207: Foreign direct investments up 33.5% to $551M in Feb

By Des Ferriols
The Philippine Star 05/12/2007

Foreign direct investments continued to surge in February, increasing by 33.5 percent as The Coca-Cola Company bought 65 percent of Coca-Cola Bottlers Philippines Inc. (CCBPI) from San Miguel Corp. (SMC).

The Bangko Sentral ng Pilipinas (BSP) reported yesterday that the transaction brought the net foreign direct investments (FDIs) in February to a net inflow of $551 million.

The February inflow, in turn, brought the two-month FDI level to $633 million, significantly higher by 33.5 percent than the $474 million in the same period last year. 

According to the BSP, total net FDI inflows during the first two months of the year reflected the surge in net equity capital inflows which rose more than two-fold to $578 million. 

"This was traced mainly to the acquisition in February by a foreign conglomerate of holdings of a local bottling company," the BSP said, referring to the Coca-Cola transaction.

CCBPI holds the Coca-Cola bottling agreement for the Philippines and is now 100 percent owned by The Coca-Cola Company since it already owned the remaining 35 percent.

Aside from the Coca-Cola transaction, the BSP said other foreign direct investments were channeled to the following industries: manufacturing (chemical products, electronics); mining (mineral processing); services (international courier, information technology development); real estate, financial intermediation, agriculture, and construction.

The BSP reported that reinvested earnings for January-February were also five-times higher, charting at $32 million compared to last year’s $6 million.

The BSP said retained earnings of foreign banks in their local branches were higher this year.

Meanwhile, loans granted by head offices to their subsidiaries in the Philippines – accounting for the bulk of the other capital account – amounted to only $23 million, down from $260 million during the comparable period a year ago.

The reason for this, the BSP said, was the repayment of loans that local subsidiaries acquired from their parent companies abroad.

The major sources of FDI flows during the two-month period were the US, Japan and Singapore. 

Total foreign direct investments are expected to hit over $2 billion in 2007, boosted by strong investor confidence after the government managed to contain its fiscal deficit for two straight years.

The BSP expects net foreign direct investments (FDIs) to reach $2.119 billion in 2007, higher than the $1.895 billion in 2006.

 

http://www.philstar.com/philstar/NEWS200705120705.htm