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MANILA – Foreign money spent in the country to expand businesses or build new ones fell sharply last May, according to the Bangko Sentral ng Pilipinas.
In a statement, the BSP on Friday said foreign direct investment yielded net inflows of $7 million that month, down from $195 million in May of last year.
“Investor sentiment remain subdued on the back of the continued concerns over developments in some advanced economies, particularly the interlocking sovereign debt and banking crises in the euro area,” the BSP said.
Overseas jitters overshadowed the Philippines’ stellar economic growth of 6.4 percent in the first quarter and Moody’s positive credit rating on the country last May, the BSP said.
Fresh equity capital worth $48 million as well as reinvested earnings amounting to $9 million helped drive net inflows in May, even as the other capital account registered net outflows of $50 million as Philippine subsidiaries and affiliates of foreign companies repaid debt owed to their parent companies.
Despite the steep fall in FDI last May, the five-month tally of $844 million was 10.2 percent higher than the net inflows registered in the January to May period of 2011.
Major sources of FDI in the first five months were the US, Australia, the Netherlands, Japan and the United Kingdom.
Investments were channeled to the manufacturing, real estate, wholesale and retail trade, and financial intermediation sectors.
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