Foreign direct investment (FDI) net inflows for the first eight months of the year stood at $6.4 billion, up 39.7% from $4.6 billion in the comparable period in 2020, the Bangko Sentral ng Pilipinas (BSP) said Wednesday.
The central bank defines FDI as an investment by a non-resident or foreign direct investor in a resident enterprise or an investment made by a non-resident subsidiary or associate in its resident direct investor.
FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.
“The cumulative FDI net inflows rose on the back of the 71.6% growth in non-residents’ net investments in debt instruments to $4.5 billion from $2.6 billion,” the BSP said.
“Likewise, reinvestment of earnings rose 11% to $776 million from the $699 million registered last year,” it said.
However, non-residents’ net investments in equity capital declined 12.2% to $1.1 billion, from $1.2 billion a year ago.
Net investments in equity capital also fell as placements dropped by 8.2% to $1.4 billion from $1.5 billion and withdrawals increased by 12.1% to $272 million from $243 million.
Equity capital placements were sourced primarily from Singapore, Japan, and the United States.
These were channeled mainly in the manufacturing; financial and insurance; electricity, gas, steam, and air-conditioning; and real estate industries.
Central bank data showed FDI net inflows in August amounted to $812 million, up 19.8% from $677 million in the same period in 2020.
The expansion in FDI net inflows for the month was driven by non-residents’ net investments in debt instruments, which grew 38% year-on-year to $636 million from $461 million in August 2020, the BSP said.
Meanwhile, the central bank said that foreigners’ reinvestment of earnings contracted 24.7% to $99 million from $132 million.
Likewise, non-residents’ net investments in equity capital declined 9.7% to $77 million from $85 million in the same month last year.
This was due to the rise in equity capital withdrawals by 51.2% to $50 million from $33 million, which more than offset the increase in equity capital placements by 7.3% to $126 million from $118 million, the BSP said.
Equity capital placements during the month originated mostly from Japan, the Netherlands, and the United States.
These were invested largely in the manufacturing, information and communication, and real estate industries.
