Net inflows of foreign direct investments jumped 39.7 percent in the first eight months to $6.4 billion from $4.6 billion a year ago, as investors remained confident on the prospects of the domestic economy, data from the Bangko Sentral ng Pilipinas show.
“The cumulative FDI net inflows rose on the back of the 71.6-percent growth in non-residents’ net investments in debt instruments to $4.5 billion from $2.6 billion,” the BSP said in a statement.
Reinvestment of earnings rose 11 percent to $776 million from $699 million a year earlier. However, non-residents’ net investments in equity capital other than reinvestment of earnings declined by 12.2 percent to $1.1 billion from $1.2 billion a year ago.
Net investments in equity capital fell as placements dropped 8.2 percent to $1.4 billion from $1.5 billion while withdrawals increased by 12.1 percent to $272 million from $243 million.
Equity capital placements came mostly from Singapore, Japan and the United States. These were invested in manufacturing; financial and insurance; electricity, gas, steam, and air-conditioning; and real estate industries.
The BSP said that in August, net FDI inflows expanded by 19.8 percent year-on-year to reach $812 million from $677 million in the same period in 2020, driven by non-residents’ net investments in debt instruments, which grew by 38 percent to $636 million from $461 million in August 2020.
Meanwhile, reinvestment of earnings contracted 24.7 percent to $99 million from $132 million while non-residents’ net investments in equity capital declined by 9.7 percent to $77 million from $85 million.
“This was due to the rise in equity capital withdrawals by 51.2 percent to $50 million from $33 million, which more than offset the increase in equity capital placements by 7.3 percent to $126 million from $118 million,” the BSP said.
Equity capital placements in August originated mostly from Japan, the Netherlands, and the United States and were directed largely to manufacturing, information and communication and real estate industries.
Net FDI inflows hit $6.6 billion in 2020. This year, the BSP expects net FDIs inflows to improve to $7 billion, taking into account the gradual reopening of major economies that could boost global trade.
The BSP statistics on FDI are compiled based on the balance of payments and international investment position manual, 6th edition. FDIs include investment 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. They can be in the form of equity capital, reinvestment of earnings and borrowings.
The BSP FDI statistics are distinct from the investment data of other government sources. FDIs reported by the BSP cover actual investment inflows.