FDI post $623 million net inflows in November 2019

February 10, 2020

Foreign direct investments (FDI) posted $623 million net inflows in November 2019, representing a 14.6 percent increase from  $543 million net inflows in the comparable period in 2018, the Bangko Sentral ng Pilipinas ( BSP) said Monday.

This was due mainly to the increases posted in all FDI components.

In particular, net investments in debt instruments (consisting mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines) recorded net inflows of $380 million from $341 million in November 2018. Similarly, net investments in equity capital grew by 12.9 percent as equity capital placements ($174 million) more than offset equity capital withdrawals ($19 million).

Reinvestment of earnings also increased by 35.1 percent to $88 million during the period.

The bulk of equity capital placements were sourced mainly from the United States, Thailand, Japan, and South Korea. These investments were channeled mostly to the financial and insurance, and real estate industries.

From January-November 2019, FDI net inflows amounted to $6.4 billion, a decline of 29.9 percent from the $9.2 billion recorded in the comparable period in 2018.

Concerns over the global economic outlook continued to curb FDI as investor confidence remained muted. Non-residents' net investments in debt instruments declined by 25.2 percent to  $4.7 billion.

Likewise, net equity capital investments contracted by 60.4 percent to $845 million.

Equity capital placements during the 11-month period emanated largely from Japan, the United States, Singapore, China, and South Korea.

These capital infusions were invested primarily in the 1) financial and insurance, 2) real estate, and 3) manufacturing industries.

Meanwhile, reinvestment of earnings reached $913 million, up by 14.4 percent from the $798 million registered from January to November. DMS