Net inflows of foreign direct investments fell 10 percent in the first three quarters to $6.7 billion from $7.5 billion a year ago amid the uncertain global trade and financial markets environment, the Bangko Sentral ng Pilipinas said Monday.
“FDI remained subdued amid lingering concerns on global economic slowdown, higher inflation, and the depreciation of the peso,” the BSP said in a statement.
It said FDI net inflows amounted to $626 million in September, or 7.9 percent lower than $680 million registered in the same month last year.
“The decline in FDI net inflows reflected the decrease in non-residents’ net investments in debt instruments, which more than offset the growth in their net equity capital placements,” the BSP said.
It said the bulk of the equity capital placements in September came from Singapore, Japan, and the United States. These were directed mostly to financial and insurance, manufacturing and real estate industries.
The BSP reduced the FDI projection this year to a net inflow of $8.5 billion from the previous estimate of $10.5 billion, taking into account the uncertain global trade environment. These headwinds included the more subdued global growth projection, higher inflation, Russia’s invasion of Ukraine and the COVID-19 pandemic.
FDIs posted a record $12.4-billion net inflow in 2021, breaching the previous record high of $10.3 billion in 2017.
The BSP statistics on FDI are compiled based on the Balance of Payments and International Investment Position Manual, 6th Edition. FDIs include investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent and investment made by a non-resident subsidiary/associate in its resident direct investor.
FDIs come in the forms of equity capital, reinvestment of earnings, and borrowings.
The BSP FDI statistics are distinct from the investment data of other government sources. BSP FDIs cover actual investment inflows. By contrast, the approved foreign investments data published by the Philippine Statistics Authority are sourced from investment promotion agencies such as the Board of Investments, Philippine Economic Zone Authority, and others and represent investment commitments, which may not necessarily be realized fully, in a given period.
