9-month FDI net inflows reach $7.3B

Published December 10, 2021, 11:53 AM

by Lee C. Chipongian

The country’s foreign direct investment (FDI) net inflows for the first nine months reached $7.3 billion, up by 43.8 percent from $5.07 billion same period in 2020, said the Bangko Sentral ng Pilipinas (BSP).

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The latest FDI number has surpassed the BSP’s projection for 2021 of $7 billion. “We’re revising it,” according to BSP Governor Benjamin E. Diokno on Friday, Dec. 10, referring to the latest FDI projection. The FDI net inflow projection for 2021 is now $8 billion.

The BSP’s reporting of FDI statistics are “distinct” from the investment data of other government sources since the central bank’s FDI covers actual investment inflows. FDIs as registered by the BSP are equity capital, reinvestment of earnings, and borrowings.

For the full-year 2021, the BSP raised its forecast to $8 billion from $7 billion and for 2022, it now expects $8.5 billion from the previous estimate of $7.5 billion. Last year, FDI net inflows amounted to $6.54 billion.

The net FDI inflows for the month of September alone stood at $660 million, up by 30.4 percent year-on-year from $506 million.

The BSP in a statement Friday said the January-September net FDIs increased “mainly on account of the 78.6 percent increase in non-residents’ net investments in debt instruments” which amounted to $5.3 billion versus $3 billion in 2020.

Reinvestment of earnings, in the meantime, totaled $865 million, up by 12.3 percent from the $770 million last year while non-residents’ net investments in equity capital other than reinvestment of earnings dropped by 15.7 percent to $1.1 billion from $1.3 billion in January-September 2020, said the BSP.

As of end-September, the central bank reported that net investments in equity capital declined “as placements contracted by 8.1 percent to $1.5 billion (from $1.6 billion) and withdrawals rose by 30.7 percent to $337 million (from $258 million).”

Most of the registered FDIs came from investors in Singapore, Japan, the US, and the Netherlands. The funds were in these sectors: manufacturing; financial and insurance; electricity, gas, steam, and air-conditioning; and real estate industries.

FDI net inflows for September only increased due to the 60.2 percent improvement in non-residents’ net investments in debt instruments which totaled $538 million from $336 million last year.

The reinvestment of earnings also grew by 25.2 percent to $89 million from $71 million while non-residents’ net investments in equity capital fell by 67.4 percent to $32 million from $99 million because of the decrease in equity capital placements which dropped by 22.3 percent to $88 million. Equity capital withdrawals also grew by 269.8 percent to $56 million in September from $15 million.

 
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