Foreign direct investments showed signs of gradual recovery in November amid the developments on the rollout of vaccines against the COVID-19 pandemic, the Bangko Sentral ng Pilipinas said Thursday.
Data showed foreign direct investments posted net inflows of $537 million in November 2020, although they were lower by 16.5 percent than $643 million registered in November 2019.
“Nonetheless, this decline was slower compared to the 24.5-percent contraction posted in October 2020 amid news of positive developments in COVID-19 vaccines,” the BSP said in a statement.
“The recent contractions in net FDI inflows were largely affected by concerns over the resurgence of COVID-19 cases and re-imposition of quarantine measures in some advanced and emerging markets,” it said.
Non-residents’ net investments in equity capital declined 57.3 percent to $66 million in November 2020 from $155 million a year earlier. Equity capital placements fell 44.8 percent to $96 million from $174 million, which equity capital withdrawals increased 57.3 percent to $30 million from $19 million.
Equity capital placements came mainly from the Netherlands, Japan, and the United States. These were invested mostly in financial and insurance, real estate and manufacturing industries.
“The drop in total FDI net inflows was partially mitigated by the increase in non-residents’ net investments in debt instruments, which grew by 3.8 percent to $415 million from $400 million in the same period in 2019,” the BSP said.
Reinvestment of earnings fell by 36.5 percent to $56 million from $88 million in November 2019.
Data showed that in the first 11 months of 2020, FDI net inflows declined by 10.8 percent to $5.8 billion from $6.5 billion a year ago. The cumulative net FDI, however, surpassed the $5.6-billion net inflow projection of the BSP for the year.
By component, non-residents’ net investments in debt instruments dropped 19.3 percent in the 11-month period to $3.8 billion from $4.7 billion. Reinvestment of earnings went down by 21.9 percent to $760 million from $974 million.
Non-residents’ net investments in equity capital expanded by 48.6 percent to $1.3 billion from $851 million, which partly eased the decline in the cumulative FDI net inflows.
Equity capital placements grew by 0.5 percent to $1.53 billion from $1.52 billion, while withdrawals declined by 60.4 percent to $265 million from $671 million.
