By Lee C. Chipongian
The central bank registered $6.4 billion foreign direct investment (FDI) net inflows for January to November 2019, down 29.9 percent compared to same time in 2018 of $9.1 billion.
“Concerns over the global economic outlook continued to curb FDI as investor confidence remained muted,” the Bangko Sentral ng Pilipinas (BSP) said Monday.
For 2019, the BSP projected a $6.8 billion net FDI. This was a revised estimate from its original $9 billion projection.
The BSP said non-residents’ net investments in debt instruments of $4.7 billion during the first 11-month period was lower by 25.2 percent year-on-year while net equity capital investments fell 60.4 percent to $845 million. Net investments in debt instruments are mostly intercompany borrowing/lending between
foreign direct investors and their subsidiaries/affiliates in the Philippines.
Investors from Japan, the US, Singapore, China, and South Korea were the main sources of equity capital placements during the period and these funds were invested in the financial and insurance, real estate, and manufacturing sectors.
As of end-November 2019, reinvestment of earnings went up by 14.4 percent year-on-year to $913 million.
For the month of November only, net FDI amounted to $623 million which was 14.6 percent higher than same time last year of $543 million.
Net investments in debt instruments went up by 11.4 percent to $380 million while net investments in equity capital also increased by 12.9 percent “as equity capital placements ($174 million) more than offset equity capital withdrawals ($19 million),” said the BSP.
Reinvestment of earnings rose 35.1 percent to $88 million in November.
“The bulk of equity capital placements were sourced mainly from the US, Thailand, Japan, and South Korea. These investments were channeled mostly to the financial and insurance, and real estate industries,” said the BSP.