The country’s net foreign direct investments (FDI) continued to decrease as of end August this year to $5.899 billion, down by 13 percent from same period last year of $6.782 billion.
The Bangko Sentral ng Pilipinas (BSP), which released the latest FDI data on Thursday, Nov. 10, attributed the slowdown in FDI to "concerns over weakening global growth prospects, particularly with the moderating demand and policy tightening in major economies.”
For the month of August, net FDIs from equity capital, reinvestment of earnings and borrowings, dropped by 19.2 percent to $797 million from $987 million same time in 2021.
The BSP said FDI net inflows declined as all major FDI components posted lower net inflows, particularly non-residents’ net investments in debt instruments of their local affiliates.
Based on cumulative numbers or the January to August data, non-residents’ net investments in debt instruments fell by 13 percent to $4.155 billion versus $4.778 billion.
The net investments in equity capital other than reinvestment of earnings as of end-August decreased by 17.1 percent to $907 million from $1.095 billion same time last year.
Data also showed that reinvestment of earnings also declined by eight percent to $836 million from $908 million.
The BSP defines FDIs as an investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent. It also includes an investment made by a non-resident subsidiary or associate in its resident direct investor
For the month of August, equity capital placements were traced from investors located in Japan and the US. These funds were invested in the manufacturing which accounted for 42 percent; real estate with 27 percent; and and the information and communication sector with 12 percent of FDIs.
For the eight-month period, the manufacturing sector received about 32 percent of FDIs, followed by real estate and construction sectors with 21 percent and 14 percent, respectively. The investments came from Japan, US, Singapore and Malaysia.
By end 2022, the BSP is projecting net FDIs will reach $10.5 billion.
Last year, net FDI 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 which was in 2017.