By Lee C. Chipongian
The central bank reported yesterday that for the first two months, net foreign direct investments (FDI) inflows amounted to $1.2 billion, down 12.2 percent from $1.3 billion same time in 2019.
The Bangko Sentral ng Pilipinas (BSP) said net FDI inflows declined due to a 44.1 percent drop in net investments in debt instruments from $984 million to $550 million while reinvestment of earnings also dropped by 16 percent from $156 million to $131 million.
For the month of February only, net FDI reached $505 million, 31.5 percent lower compared to $737 million same time in 2019.
FDIs are not only equity capital and reinvestment of earnings, but are also borrowings.
According to the BSP, “FDI declined as uncertainties on the impact of the COVID-19 outbreak dampened investor sentiment.”
In February, there was a 26.4 percent decrease in net investments in debt instruments to $317 million from $431 million. Net placements of equity capital also dropped to $129 million or 43 percent year-on-year from $227 million.
“Bulk of the equity capital placements during the period were sourced from Singapore, Japan, and the US,” the BSP said. “These investments were channeled mainly to manufacturing, real estate, and wholesale and retail trade industries.”
In the meantime, some $59 million reinvestment of earnings were registered during the month but this was lower compared to $80 million in February last year.
The BSP said the January to February FDI and its decline was “tempered by the 162 percent increase in net equity capital placements to $481 million from $184 million.”
For the first two months, the equity capital placements came mostly from investors in the Netherlands, Singapore, Japan, and the US, and these were also invested in manufacturing, real estate, and wholesale and retail trade industries, said the BSP.