Net inflows of foreign direct investments climbed 14.6 percent in November 2019 to $623 million from $543 million a year ago, the Bangko Sentral ng Pilipinas 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,” the BSP said in a statement.
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 came mainly from the United States, Thailand, Japan, and South Korea. These investments were channeled mostly to the financial and insurance, and real estate industries.
Data, however, showed that from January to November 2019, FDI net inflows declined 29.9 percent to $6.4 billion from $9.2 billion in the same 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,” the BSP said. Julito G. Rada
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 financial and insurance, real estate, and manufacturing industries.
Meanwhile, reinvestment of earnings reached $913 million, up by 14.4 percent from $798 million registered in the first eleven months of 2018.
BSP Governor Benjamin Diokno said net inflows of FDIs in 2020 could exceed $10 billion once the proposed Corporate Income Tax and Incentives Rationalization Act or CITIRA bill was passed into law.
The BSP was expecting FDIs to post a net inflow of $8.8 billion this year. Diokno said the amount could be higher if the CITIRA would be approved into law.