Philippine Investments Up 51%

(Yahoo News) - Net foreign direct investment (FDI) into the Philippines rose 51 percent to $357 million in January from a year ago due to improving economic prospects, the central bank said on Tuesday.

Foreign banks accounted for most of the inflows as they opted to retain their earnings in local branches.

Net equity capital inflows rose nearly 70 percent in January to $70 million as the Philippines' improving government finances, strong domestic demand and low inflation attracted overseas investors, particularly from Japan and the United States.

The electronics sector, services industry and real estate companies benefited from the inflows.

Last month, net FDI in December rose 5.7 percent from a year-earlier, bringing total investment inflows to $2.35 billion last year, 18 percent higher than a central bank estimate.

President Gloria Macapagal Arroyo has won plaudits for reducing the government's budget deficit but economists say the country's investment rate needs to rise to around 20 percent of Gross Domestic Product from 15 percent currently to make significant inroads into poverty.

The central bank said it expected FDI flows to remain positive for the rest of 2007, with investors taking advantage of the country's improving investment climate.