Net inflows of foreign direct investments surged 114 percent in April to $679 million from $317 million a year ago, on improving investor sentiment on the country’s macroeconomic fundamentals and growth prospects, the Bangko Sentral ng Pilipinas said Monday.
The BSP said in a statement the latest figure brought the FDI net inflows in the first four months to $3.1 billion, or 56.3 percent higher than $2 billion registered in the same period last year.
“The higher cumulative FDI net inflows was due to the improvements in all components, led by non-residents’ net investments in debt instruments, which rose by 115.2 percent to $1.9 billion from $897 million,” the BSP said.
Net placements of equity capital also grew 8.1 percent to $818 million from $756 million in the same month last year. Reinvestment of earnings increased 2 percent in April to $307 million from $301 million a year earlier.
“FDI net inflows in April 2021 rose on the back of positive foreign investor sentiment on the country’s macroeconomic fundamentals and strong growth prospects,” the BSP said.
Non-residents’ net investments in debt instruments climbed by 121.2 percent in April to $500 million from $226 million in April 2020, while met investments in equity capital rose to $97 million from $3 million.
Equity capital placements increased by 131 percent to $108 million from $47 million, while withdrawals decreased by 75.1 percent to $11 million from $44 million.
Equity capital placements in April came mostly from Japan, the United States and Singapore. These were invested largely in the manufacturing and real estate industries.
The continued rise in net investments in equity capital in April resulted in a cumulative increase of 8.1 percent to $818 million in the first four months.
The BSP statistics on FDIs are compiled based on the balance of payments and international investment position. 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.
These data are separate from the investment approvals and commitments reported by the Department of Trade and Industry, the Board of Investments, the Philippine Economic Zone Authority and other investment promotion agencies.
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.
Net FDI inflows reached $6.5 billion in 2020. The BSP expects net FDIs to hit $7.5 billion this year and increase further to $8.5 billion next year.