FDI inflows declined 40% to $4.5 billion in eight months

Net inflows of foreign direct investments fell 45 percent in August to $416 million from $758 million a year ago, as the uncertainty in the global environment continued to dampen investor sentiment, the Bangko Sentral ng Pilipinas said Monday.

The figure brought FDl net inflows to $4.5 billion in the first eight months, down 40 percent from $7.5 billion registered in the same period last year.

“The ongoing uncertainty in the global environment continued to dampen investor sentiment, which caused postponements in investment plans,” the Bangko Sentral said.

The BSP said in a statement the bulk of the net inflows in August were in the form of investments in debt instruments or inter-company borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines, which reached $263 million, down from $534 million a year earlier. 

“Non-residents’ net equity capital investments dropped by 55.3 percent to $77 million from $172 million in the same month last year, as the decline in placements from $187 million to $86 million outweighed the decrease in withdrawals from $16 million to $10million,” the BSP said.

Equity capital placements in August came mostly from Japan, the United States, Hong Kong, Cayman Islands, and Singapore. These investments went to manufacturing, real estate, financial and insurance, information and communication, and wholesale and retail trade industries. 

Reinvestment of earnings expanded by 46 percent to $77 million from $53 million in the same month last year. 

Meanwhile, the decline in FDl inflows in the first eight months resulted from the contraction in non-residents’ net investments in debt instruments by 32.5 percent to $3.3 billion from $4.9 billion and equity capital by 73.4 percent to $536 million from $2 billion. 

Net inflows of FDIs fell 4.4 percent in 2018 to $9.802 billion from a record $10.256 billion in 2017.

The full-year number missed the official target of $10.4-billion net inflows set by the Bangko Sentral in November 2018.

The BSP expects net FDIs to hit $9 billion in 2019.

Topics: net inflows , foreign direct investments , Bangko Sentral ng Pilipinas , net equity capital investments
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