Net inflows of foreign direct investments jumped 140 percent in March to $808 million from $337 million a year ago, on improved sentiment following the rollout of COVID-19 vaccination program and the gradual resumption of domestic activities, the Bangko Sentral ng Pilipinas said Thursday.
This brought the cumulative FDI net inflows in the first quarter to $2.4 billion, up by 45 percent from $1.6 billion registered in the same period last year.
The increase in FDIs in the first quarter was driven by the 113.2-percent growth in non-residents’ net investments in debt instruments to $1.4 billion from $671 million. Reinvestment of earnings improved 5.4 percent to $225 million from $213 million a year earlier.
“March 2021 FDI increased on account of improved investor sentiment amid the gradual resumption of domestic activities, while adhering to the minimum health standards and government efforts to accelerate the vaccination program,” the BSP said in a statement.
“In particular, FDI net inflows during the period expanded due to the substantial increase in non-residents’ net investments in debt instruments to $380 million from $45 million in the comparable month last year,” it said.
Non-residents’ net investments in equity capital went up by 52.8 percent to $349 million in March from $229 million in the same month last year. Equity capital placements expanded by 35.9 percent to $377 million from $278 million, while withdrawals declined by 42.6 percent to $28 million from $49 million.
Data showed that the bulk of the equity capital placements in March came mostly from Singapore, Japan and the United States. These were channeled mainly to electricity, gas, steam, and air-conditioning; and manufacturing industries.
Meanwhile, BSP Governor Benjamin Diokno said the rollout of the vaccination program would result in the generation of more jobs that could make the economy recover faster in the coming months from the five successive quarters of recession.
“Unemployment peaked in April 2020 at 17.6 percent. But it stood at 8.7 percent in April 2021. The vaccine rollout could [trigger] further jobs creation,” Diokno said in an online briefing.
Data from the Philippine Statistics Authority showed that unemployment rate in April increased to 8.7 percent from 7.1 percent in March. The number of jobless individuals was registered at 4.14 million in April.
Diokno said the BSP remained vigilant on the evolving wage dynamics and its ability to influence the growth of prices in line with its mandate of promoting price stability.
“The country’s low and stable inflation and calibrated wage adjustments over the past few years are a testament to the careful and steady collaboration between the BSP and the wage boards,” Diokno said.
“The BSP serves as a resource institution in the regional wage boards, providing information on inflation, other key macroeconomic trends and the impact of wage decisions on inflation. Our aim is to help provide guidance in the minimum wage determination. In view of this, the BSP will continue to actively participate in discussions on wage policies,” he said.