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Foreign direct investments (FDI) registered with the Bangko Sentral ng Pilipinas (BSP) from January to November last year reached a net amount of $8.58 billion, up 4.4 percent compared to the previous year’s $8.22 billion.
Bulk of these FDIs are invested in the manufacturing sector.
For the month of November only, net FDI totaled $901 million, which was 19.8 percent lower from the $1.123 billion net inflows in the same period in 2023.
BSP reports FDI as equity capital, reinvestment of earnings and borrowings of non-resident direct investors.
In November, non-residents' net investments in debt instruments declined by 17.9 percent to $791 million from $964 million in 2023.
Non-residents' net investments in equity capital other than earnings reinvestment also fell by 58.9 percent to $35 million from $85 million. As for reinvestment of earnings, this slightly increased by 1.1 percent to $74 million.
Based on data, investors from Japan contributed 49 percent of FDIs in November, while US and Singapore-based investors accounted for 24 percent and 17 percent, respectively, of the total. About 49 percent of these investments were channeled into the manufacturing sector; 25 percent in real estate; nine percent in financial and insurance; and five percent in administrative and support service industries.
The BSP FDI statistics cover actual investment inflows, which makes it different from the other government investment data such as those released by the Philippine Statistics Authority, which are investment commitments.
On a cumulative basis, reinvestment of earnings declined by 3.6 percent to $1.107 billion as of end-November from $1.148 billion in 2023.
The net debt instruments also dipped by 0.1 percent to $5.982 billion versus $5.988 billion in 2023.
Meanwhile, non-residents’ net investments in equity capital other than reinvestment of earnings went up by 37.7 percent to $1.491 billion from $1.148 billion of the previous year.
For the first 11 months of 2024, equity capital placements mostly came from investors based in Japan and the United Kingdom, with 39 percent each in the share of the total. US-based investors contributed 10 percent while Singaporeans accounted for five percent of the total net FDIs.
The BSP said 72 percent of FDIs were invested in the manufacturing sector, 12 percent in the real estate sector and four percent in the wholesale and retail trade.
Based on the latest forecasts of BSP external accounts, it is expected that FDIs will reach $9 billion in 2024 and $10 billion this year.
FDI inflows primarily depend and are supported by strong growth prospects, the country’s moderating inflation, and government reforms intended to increase foreign investments.
According to the central bank, FDIs are a crucial source of external financing. Foreign investments also support economic economic expansion in terms of employment, technology transfer and the integration of markets.
