Net inflows of foreign direct investments jumped 46.3 percent in February to $893 million from $611 million a year ago, reflecting the sustained investors’ confidence in the Philippine economy, the Bangko Sentral ng Pilipinas said Wednesday.
The figure brought the net inflows in the first two months to $1.7 billion, or 8 percent higher than $1.6 billion registered in the same period last year.
“The growth in FDI reflected mainly the continued infusion of funds by non-resident direct investors to their local subsidiaries,” the BSP said in a statement.
“Specifically, the expansion in the January-February 2022 net inflows was due mainly to the 29.3-percent growth in non-residents’ net investments in debt instruments to $1.4 billion from $1 billion in the comparable period last year,” it said.
Reinvestment of earnings was broadly stable at $152 million. Meanwhile, non-residents’ net investments in equity capital (other than reinvestment of earnings), though remaining positive, declined by 46.7 percent to $204 million from $383 million in the same period in 2021.
“This resulted as equity capital placements declined by 49.4 percent to $234 million from $462 million, which more than offset the 62.1-percent drop in withdrawals to $30 million from $79 million,” the BSP said.
Equity capital placements originated mainly from Japan, the United States and Kuwait. These were invested mostly in manufacturing, financial and insurance and real estate industries.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the continued affirmation of the country’s investment-grade ratings for the second straight year into the pandemic, at one to three notches above the minimum investment grade, would help attract more foreign investments and credit facilities at better terms into the country.
“Better economic recovery prospects and increased infrastructure spending to pump-prime the economy as well as part of preparations for the May 2022 elections also helped attract more FDIs, as these infrastructure projects help increase the country’s competitiveness over the long-term in terms of improved movement of goods [exports, imports], workers, tourists,” Ricafort said.
Ricafort said FDIs could continue to go up amid better global economic prospects as some developed countries that are the major sources of FDIs move towards herd immunity.
He said attracting more FDIs into the country is a pillar in the country’s economic recovery program as they create more jobs and other economic activities in the country.
Net inflows of foreign direct investments reached a record $10.5 billion in 2021, breaching the previous high of $10.3 billion in 2017. The BSP this year expects FDI net inflows to reach $11 billion.