Year-to-date FDIs at $1-B, exceeding BSP's 2009 target

MANILA - Foreign businessmen continued to regain optimism on the economy as investments in the Philippines grew more than 7 times in May, the Bangko Sentral ng Pilipinas (BSP) reported Tuesday.

The country's foreign direct investments (FDI) reached $379 million in May, a 658% growth from $50 million recorded in the same period last year. Last month, FDIs grew 154% to $601 million.

Of the amount, the BSP said it received $319 million in net equity capital, following the "purchase by a foreign enterprise of the shares of a local beverage manufacturing firm held by a local holding company."

In the same month, diversified conglomerate San Miguel Corp. (SMC) completed the sale of its 43.25% stake in beer unit San Miguel Brewery Inc. (SMB) to Japanese brewing giant Kirin Holdings Co. Inc. SMC said it sold 4.48 billion shares in SMB to Kirin at P8.841 apiece.

The sale left SMC with a 51% majority stake in SMB, which produces and markets San Miguel Pale Pilsen, Red Horse, San Mig Light and other affiliated brands.

In February, Kirin signed a share purchase agreement with SMC to buy the latter's 43.25% SMB stake for P58.9 billion. Together with a 5.05% stake it bought via a mandatory tender offer to public investors, the Japanese firm now owns 48.3% of SMB.

Beyond target

The latest figure brings the country's FDIs for the first 5 months of the year to $1 billion, an 86.1% growth from the $552 million recorded in the same period last year. This is $300 million more than the BSP's full-year target of $700 million for FDIs.

On the other hand, net equity capital for the 5-month period reached a record high of $946 million. The BSP said a total of $1 billion in gross equity capital placements were made by investors from the Japan and the United States, with the manufacturing, real estate, construction, financial intermediation, and trade and commerce sectors benefiting from these inflows.

Reinvested earnings, meanwhile, reached $80 million as of end-May, a reversal of the $207-million net outflows posted a year ago. The BSP said foreign businessmen were encouraged to reinvest their earnings in local enterprises due to positive news such as declining inflation, a healthy external payments position, and good first quarter corporate earnings results.