The Bangko Sentral ng Pilipinas revised upward the target for 2021 foreign direct investments to $8 billion from $7 billion on improving global economic outlook despite the prolonged impact of the COVID-19 pandemic.
It released the revised target in an online briefing Friday, after latest data showed that net FDI inflows in the first nine months hit $7.3 billion, up 43.8 percent from $5.1 billion net inflows registered a year ago.
The BSP attributed the remarkable performance of FDIs in the period to the 78.6-percent increase in non-residents’ net investments in debt instruments to $5.3 billion from $3 billion last year.
Reinvestment of earnings reached $865 million, up by 12.3 percent from $770 million a year earlier. Meanwhile, non-residents’ net investments in equity capital other than reinvestment of earnings fell 15.7 percent to $1.1 billion from $1.3 billion.
“Net investments in equity capital declined as placements contracted by 8.1 percent to $1.5 billion [from $1.6 billion] and withdrawals rose by 30.7 percent to $337 million [from $258 million],” the BSP said.
The bulk of the equity capital placements came from Singapore, Japan, the United States and the Netherlands and were invested in manufacturing; financial and insurance; electricity, gas, steam, and air-conditioning; and real estate industries.
Net FDIs continued its growth momentum for the fourth consecutive month in September, recording a 30.4-percent expansion year-on-year to $660 million from $506 million in the same month last year.
“FDI net inflows in September 2021 rose on the back of the 60.2-percent increase in non-residents’ net investments in debt instruments to $538 million from $336 million in the same month last year. Likewise, reinvestment of earnings grew by 25.2 percent to $89 million from $71 million,” the BSP said.
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.
FDI net inflows amounted to $6.6 billion in 2020.