FDI at all-time high of $10.5 B in 2021

Foreign direct investment (FDI) net inflows last year reached an all-time high of $10.518 billion, 54.2 percent higher than $6.822 billion in 2020, according to the Bangko Sentral ng Pilipinas (BSP).

The previous record level was $10.3 billion in 2017, said the BSP. The 2021 net FDI also surpassed the BSP’s projection of $8.5 billion.

“The growth in FDI reflected continued positive foreign investor sentiment on the country amid expectations of a rebound in domestic economic activity and declining COVID-19 reported cases, as well as the strengthening of the global economy,” noted the BSP in a statement.

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.

The central bank said the cumulative net inflows was higher year-on-year due to the 80.4 percent growth in non-residents’ net investments in debt instruments which reached $7.527 billion from $4.172 billion in 2020.

Reinvestment of earnings also increased by 34.7 percent to US$1.272 billion from $944 million. Non-residents’ net investments in equity capital other than reinvestment of earnings rose slightly by 0.7 percent and to $1.718 billion.

As for equity capital placements, this amounted to $2.118 billion, while withdrawals totalled $399 million.

Meantime, equity capital placements mostly came from Singapore, Japan, the US, and the Netherlands. “Capital infusions were channeled mainly to the manufacturing, electricity, gas, steam, and air-conditioning, financial and insurance, and real estate industries,” said the BSP.

For the month of December 2021, net FDIs totalled $1.066 billion, up by 59 percent from same December 2020’s $671 million.