The country’s net foreign direct investment (FDI) inflows went up by 41.5 percent year-on-year in January to $961 million from $679 million same time in 2020, the Bangko Sentral ng Pilipinas (BSP) said.
“This development reflects the investors’ optimism at the start of the year due in turn to the gradual reopening of the economy under the ‘new normal’ condition, easing of lockdown measures, and positive news about the rollout of COVID-19 vaccines,” said the BSP in a statement.
FDIs as reported by the BSP are the actual investment flows and are in equity capital, reinvestment of earnings and borrowings. It includes investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and investment made by a non-resident subsidiary/associate in its resident direct investor, as explained by the BSP.
For the month of January, increase in FDI mainly came from the 116 percent growth in non-residents’ net investment in debt instruments which reached $535 million versus $248 million in January 2020.
Non-residents’ net investment in equity capital also increased slightly in January to $351 million from $350 million previously, or up by 0.5 percent. Inflows from new placements declined by 3.3 percent to $362 million from $374 million but there was less withdrawals of $10 million in January compared to $24 million last year. Equity capital withdrawals dropped by 57.9 percent.
The BSP said equity capital placements came from investors in Singapore, Japan, and the Netherlands. These funds were invested in these sectors: financial and insurance; manufacturing; and professional, scientific, and technical industries.
But reinvestment of earnings in January was down by 9.2 percent to $74 million from $82 million same time in 2020.
For the whole of 2020, the first year of the COVID-19 pandemic, FDI net inflows fell by 24.6 percent to $6.54 billion from $8.67 billion in 2019. The end-year result was better than what the BSP had projected which was a $6 billion.