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Philippines: FDIs double, hit $9.2 billion from January to November
MANILA, Philippines — The net inflow of foreign direct investments (FDIs) almost doubled to a four-month high in November, resulting in a 52.5 percent increase during the 11-month period last year, according to the Bangko Sentral ng Pilipinas.
BSP Governor Benjamin Diokno said FDI inflow went up to $1.09 billion in November from $599 million in the same month in 2020, the highest since the $1.28 billion recorded in July last year.
For the 11-month period last year, the BSP chief said FDIs reached $9.24 billion or $3.18 billion more than the $6.06 billion recorded in the same period in 2020.
The Philippines surpassed the revised $8 billion target set by the BSP for 2021 as early as October.
Diokno said the net inflow in November rose on the back of the 109.3 percent upturn in non-residents’ net investments in debt instruments to $896 million as multinational companies continued to inject more money into their affiliates in the Philippines.
Reinvestment of earnings increased by 25.2 percent to $81 million.
Likewise, Diokno said non-residents’ net investments in equity capital jumped by 78.8 percent to $118 million.
BSP data also showed equity capital placements from the US and Japan rose by 37.9 percent to $81 million and were channeled to manufacturing, real estate, financial and insurance industries.
Withdrawals, meanwhile, fell by 52.8 percent to $14 million in November last year.
For this year, the BSP is looking at a higher net FDI inflow of $8.5 billion as the country continues to recover from the impact of the global health crisis.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the robust inflows is a bright spot for the Philippine economy.
“These would lead to more economic activities, as well as creation of more jobs or employment as the economy re-opened further toward greater normalcy, with the nationwide adoption since November 2021 of the alert level system or granular lockdowns from the large-scale lockdowns in the past,” he said.
Ricafort said the reduction of the corporate income tax by five percent since July last year through Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, as well as the easing of foreign ownership limits such as the Retail Trade Liberalization Act and the amendments to the Public Services Act, would attract more FDI into the country.
“Near-record-low interest rates and the recent rising trend in local or global long-term interest rates prompted more global companies to be more aggressive in borrowing and other fund-raising activities to finance new investments and expansion projects, including more FDIs into the Philippines,” he said.
Source: https://www.philstar.com/business/2022/02/11/2159951/fdis-double-hit-92-billion-january-november