Net inflows of foreign direct investments climbed 37.8 percent in the first five months to $3.5 billion from $2.5 billion in the same period last year, data from the Bangko Sentral ng Pilipinas show.
The increase was supported by stable equity capital placements and higher reinvestment of earnings and borrowings by foreign direct investors this year.
Non-residents’ net investments in debt instruments surged 76.2 percent to $2.2 billion from $1.2 billion a year ago, while reinvestment of earnings rose 3 percent to $407 million from $395 million in the same period last year. Net investments in equity capital remained broadly stable at $1.3 billion.
The BSP said while equity capital placements declined 5.4 percent in the five-month period to $1.0 billion from $1.1 billion, withdrawals decreased 26.7 percent to $139 million from $190 million.
Equity capital placements came mainly from Singapore, Japan and the United States and were infused mainly into financial and insurance; electricity, gas, steam, and air-conditioning; manufacturing; and real estate industries.
The BSP said, however, that in May FDI net inflows declined by 25.4 percent to $429 million from $575 million in the same month last year, amid the lingering COVID-19 pandemic.
“The FDI decline in May 2021 reflected renewed investor concerns on the rising cases of the new variants of COVID-19 globally. By component of FDI, non-residents’ net investments in debt instruments during the month contracted by 23.4 percent to $269 million from $351 million in May 2020,” the BSP said.
Non-residents’ net investments in equity capital declined by 53.4 percent to $60 million in May from $130 million in the same month last year. Equity capital withdrawals increased 70.2 percent to $21 million from $13 million while equity capital placements went down by 42.6 percent to $82 million from $142 million.
Meanwhile, reinvestment of earnings rose 6 percent to $99 million from $94 million in May 2020.
Last year, FDI posted net inflows of $6.5 billion. The BSP expects net FDI inflows to hit $7.5 billion this year and increase further to $8.5 billion by 2022, taking into account the improving global conditions amid the rollout of vaccines against the virus.
The BSP statistics on FDIs are compiled based on the balance of payments and International Investment Position Manual, 6th Edition.
FDIs include investments 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.
The BSP FDI statistics are distinct from the investment data of other government sources.
