December FDIs down 4.8% to $677 million: BSP

March 11, 2019

Foreign direct investments (FDI) registered $677 million net inflows in December 2018, which is 4.8 percent lower than the $712 million net inflows in the same month of 2017.

The decline in FDI was due largely to the 57.6 percent drop in net investments of equity capital to $132 million from $312 million a year ago, the Bangko Sentral ng Pilipinas (BSP) said Monday.

Equity capital placements during the month originated mainly from Thailand, the United States, Japan, Singapore, and the Netherlands.

The placements were invested largely in financial and insurance,  electricity, gas, steam and air-conditioning supply, wholesale and retail trade, manufacturing, and real estate industries, the BSP said.

Reinvestment of earnings also declined to $61 million from $65 million. Meanwhile, net investments in debt instruments (consisting mainly of intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines) increased by 44.7 percent to $484 million in December from $335 million in December 2017.

On an annual basis, FDI net inflows reached US$9.8 billion in 2018, down by 4.4 percent from the US$10.3 billion net inflows in 2017.

Net investments of equity capital were lower at $2.3 billion compared to $3.4 billion recorded in 2017. The bulk of equity capital placements in 2018 were sourced mainly from Singapore, the United States, Hong Kong, Japan, and China.

These were channeled primarily to manufacturing, financial and insurance, real estate, electricity, gas, steam and air-conditioning supply, and arts, entertainment and recreation industries.

Reinvestment of earnings also declined slightly by 0.4 percent to $859 million in 2018 from $863 million in 2017.

By contrast, net availment of debt instruments rose by 11.3 percent to $6.7 billion in 2018 from $6 billion in 2017. DMS