Foreign direct investments dropped 3.4 percent in the first 11 months to $5.5 billion from $5.64 billion a year ago, despite the double-digit growth in net inflows recorded in November.
Data from Bangko Sentral ng Pilipinas showed that net inflows of FDIs rose 16.4 percent in November to $464 million from $399 million a year ago. The November figure was also higher than the $451-million net inflow in October 2015.
“The robust FDI net inflows during the month was underpinned by sustained investor confidence on the economy on the back of the country’s sound macroeconomic fundamentals,” Bangko Sentral said in a statement.
All major components recorded increases from the previous year’s levels. Contributing largely to the growth of FDI net inflows was the 26.6-percent expansion of net placements by parent companies abroad in debt instruments issued by local affiliates to $187 million from $148 million.
Net placements in equity capital also increased 11.2 percent to $224 million from $201 million a year ago. This developed as equity capital placements amounting to $234 million more than offset equity capital withdrawals of $10 million.
The bulk of equity capital placements came from the Netherlands, Korea, Hong Kong, Singapore and the United States. These were channeled to manufacturing, financial and insurance, real estate, wholesale and retail trade, and information and communication activities.
Data showed the 11-month FDI net inflows declined, on account of the 9.9-percent drop in net placements in debt instruments to $3 billion from $3.3 billion.
Bangko Sentral forecast that FDI net inflows would reach $6.3 billion in 2016. Bangko Sentral said the target was in line with the sustained positive developments in the domestic economy and some improvement in the global economic conditions as well as the implementation of public-private partnership projects.
It said the implementation of various PPP projects would send a strong signal to investors, boosting their confidence to invest in the country.
Foreign direct investments posted a record $6.2-billion net inflow in 2014, or 65.9 percent higher than $3.737 billion-net inflow registered in 2013.
Bangko Sentral’s statistics on foreign direct investments cover actual investment inflows, which could be in the form of equity capital, reinvestment or earnings and borrowings between affiliates.