Philippines: Improving investor sentiment propped up FDIs in February

MANILA, Philippines — Foreign direct investments weathered headwinds in February, yielding inflows as an analyst believes an uptrend could materialize in the second half of 2023.

Data released by the Bangko Sentral ng Pilipinas on Wednesday amounted to net inflows of $1 billion in February, surging 13% year-on-year.

Year-to-date however, FDIs slumped at an annualized rate of 14.6% to $1.5 billion. FDIs represent firmer commitments from foreign investors that generate jobs for Filipinos unlike the so-called “hot money”, which enters and leaves markets with ease.

The BSP projected the Philippines will rake in $11 billion in 2023. FDIs landed into net inflows in 2022 to $9.2 billion.

Domini Velasquez, chief economist at China Banking Corp., said the haul in February reflected an upturn in sentiment across the global economy.

“Previously anticipated recessions did not materialize. In particular, the US economy continues to post improving economic conditions,” she said in Viber message.

Data broken down showed that intercompany borrowings between multinational companies and their local affiliates rose 19.4% year-on-year to $910 million in February.

Equity capital placements dipped 3.1% on-year to $113 million in the same period.

On the one hand, reinvestment of earnings sank 6.5% on-year to $62 million in February. — Ramon Royandoyan