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Philippines: Foreign investments jump 40% to $6.37 billion
MANILA, Philippines — The net inflow of foreign direct investments (FDIs) jumped 40 percent to $6.37 billion in the first eight months, from $4.56 billion in the same period last year, as multinational companies continued to inject more money into their affiliates in the Philippines amid the economy’s gradual recovery, according to the Bangko Sentral ng Pilipinas.
BSP Governor Benjamin Diokno said the cumulative FDI net inflow from January to August rose on the back of the strong growth in net investments in debt instruments.
Data showed the infusion by foreign direct investors into their subsidiaries in the Philippines in the form of net investments in debt instruments surged by nearly 72 percent to $4.51 billion during the eight-month period from a year-ago level of $2.63 billion.
Likewise, reinvestment of earnings increased by 11 percent to $776 million from $699 million.
However, non-residents’ net investments in equity capital declined by 12 percent to $1.1 billion from $1.2 billion a year ago.
Equity placements coming mainly from Singapore, Japan and the US channeled to manufacturing, financial and insurance, electricity, gas, steam and air-conditioning, as well as real estate slipped 8.2 percent to $1.4 billion.
On the other hand, equity withdrawals increased by 12 percent to $272 million.
For August alone, the net FDI inflow grew by almost 20 percent to $812 million from $677 million in the same month last year as the investments in debt instruments jumped by 38 percent to $636 million.
This was enough to offset the 25 percent decline in reinvestment of earnings to $99 million from $132 million.
Equity placements in August increased by 7.3 percent to $126 million, while withdrawals jumped by 51 percent to $50 million.
The National Capital Region (NCR) and nearby provinces were placed under enhanced community quarantine in August due to the resurgence of COVID cases with the emergence of the highly transmissible Delta variant.
Due to intermittent lockdowns amid the resurgence of COVID-19 cases that could lead to a slower recovery from the pandemic-induced recession, the BSP is now looking a net FDI inflow of $7 billion instead of $7.5 billion this year.
With the continued reopening of the economy as well as the faster vaccination rate, economic managers are confident the lowered four to five percent gross domestic product (GDP) growth target for the year could be exceeded.
The GDP grew at a stronger-than-expected pace of 7.1 percent in the third quarter, although slower than the 12 percent expansion recorded in the second quarter of the year.
The Philippine exited recession in the second quarter after contracting by 3.9 percent in the first quarter that stretched the recession to five quarters.
Source: https://www.philstar.com/business/2021/11/11/2140378/foreign-investments-jump-40-637-billion