FDI up 12.1% to $3.4 B in April

The Philippines registered foreign direct investment (FDI) net inflows of $3.43 billion as of end-April, 12.1 percent higher than the same period last year of $3.06 billion, Bangko Sentral ng Pilipinas (BSP) data showed.

BSP, which registers FDIs as equity capital, reinvestment of earnings, and borrowings, reported on Monday, July 11, that for the month of April only, net inflows increased by 48.3 percent year-on-year to $989 million versus $667 million in 2021.

The BSP said this positive development in both the cumulative and monthly FDI data was due mainly to the increase in non-residents’ net investments in debt instruments. “Meanwhile, net equity placements (other than reinvestment of earnings) declined during the period,” it noted.

The BSP also said that in April, the net inflows of FDI improved following the increases recorded across all components, led by non-residents’ net investments in debt instruments.

Equity capital placements also expanded, which were mostly investments from Malaysia, the United States, and Japan. These funds were invested in these sectors: construction; real estate; professional, scientific, and technical; and manufacturing industries.

For the January to April period, non-residents’ net cumulative investments in debt instruments increased by 35.3 percent to $2.58 billion from $1.91 billion in the same period in 2021.

Non-residents’ net investments in equity capital other than reinvestment of earnings declined by 26.4 percent to $845 million from $1.15 billion same period last year.

Reinvestment of earnings slightly rose by 0.9 percent to $329 million from $326 million.

Equity capital placements, meanwhile, also declined by 39.4 percent to $576 million from $950 million. The amount of equity capital withdrawals likewise decreased by 53.2 percent from $127 million to $59 million.

The BSP is projecting FDI net inflows to reach $11 billion by end-2022 and $12 billion next year.

Last year, FDI net inflows increased to an all-time high of $10.52 billion, up by 54.2 percent from $6.82 billion in 2020. The previous record level was $10.3 billion in 2017.

The BSP statistics on FDI are compiled based on the balance of payments. It is described as “distinct” from the investment data of other government sources because the BSP captures actual investment inflows while those reported by Investment Promotion Agencies or IPAs represent investment commitments, which may not necessarily be realized fully in a given period, said the BSP.