Net inflows of foreign direct investments (FDI) declined to $813 million in August, 14.5 percent lower than the $951 million recorded in the same month a year ago due to lower funds parked in debt instruments.

Nevertheless, the Bangko Sentral ng Pilipinas (BSP) on Monday reported FDI net inflows in the first eight months grew by 3.9 percent to $6.1 billion from $5.8 billion registered in the same period a year ago.

In August, investments in debt instruments fell by 21.6 percent to $529 million from $675 million year-on-year.

Foreigners’ reinvestment of earnings also declined by 9.4 percent to $217 million from $240 million.

However, equity investments excluding reinvestment of earnings jumped by 83.6 percent to $66 million from $36 million.

Top recipients of equity investments included firms in manufacturing, real estate and electricity, gas, steam and air-conditioning supply.

Most FDI for the month came from Japan with a 72 percent share, while funds from United States-based investors accounted for 17 percent.

Top FDI source

From January to August, the United Kingdom emerged as the top country source of FDI, representing 45 percent of the total. This was followed by Japan with a 36 percent share and the United States with 8 percent.

The figures were registered after the BSP eased its policy rate by 25 basis points to 6.25 percent on 15 August to spur higher consumption of goods and services.

Rizal Commercial Banking Corporation chief economist Michael Ricafort said companies would continue to gain more profits as the BSP projected lower inflation rates.

“This outlook is supported by well-anchored inflation expectations over the policy horizon. The downside risks are linked mainly to lower import tariffs on rice, while upside risks could come from higher electricity rates and external factors,” BSP Governor Eli Remolona Jr. said.

Overall inflation slid to 3.3 percent in August from 4.4 percent in July, according to the Philippine Statistics Authority.

Bank of the Philippine Islands Wealth president and chief executive officer Maria Theresa Marcial said investors could shift some investments to equities for dividend incomes while taking advantage of gains from short-term debt papers before the BSP further lowers its rate.

Ricafort added foreign investors were probably waiting for the enactment of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) which was finally realized on Monday.