Foreign direct investments (FDIs) in the Philippines posted a net inflow of $753 million in July 2023, up 35.7 percent from $555 million a year ago, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.
The BSP said in a statement the expansion was led by the 108.4-percent increase in non-residents’ net investments in debt instruments to $575 million from $276 million.
This more than offset the decrease in non-residents’ net investments in equity capital (other than reinvestment of earnings) by 52.6 percent to $65 million from $137 million and their reinvestment of earnings by 20.1 percent (to $114 million from $142 million).
Equity capital placements came mostly from Japan, the United States and Singapore and were channeled primarily to manufacturing, real estate, and financial and insurance industries.
The BSP said that in the first seven months of 2023, cumulative net FDI inflows declined by 14.7 percent to $4.7 billion from $5.5 billion in the same period last year.
“FDI declined amid concerns over slowing global growth,” the BSP said.
The BSP statistics on FDIs are compiled based on the Balance of Payments and International Investment Position Manual, 6th Edition (BPM6).
FDIs include investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and investment made by a non-resident subsidiary/associate in its resident direct investor. FDIs can be in the form of equity capital, reinvestment of earnings and borrowings.
The BSP FDI statistics are distinct from the investment data of other government sources. BSP FDI covers actual investment inflows.
The approved foreign investments data tpublished by the Philippine Statistics Authority, which are sourced from investment promotion agencies, represent investment commitments which may not necessarily be realized fully, in a given period.
The PSA data are also not based on the 10-percent ownership criterion under BPM6.
Net FDI inflows in 2022 reached $9.4 billion, lower than the record $12 billion in 2021.