FDI inflows hit $5.72B in 2015, miss gov’t target

Foreign-led investments in job-generating projects slid 0.3 percent year-on-year to $5.72 billion last year and fell below the government’s target, data released by the Bangko Sentral ng Pilipinas (BSP) yesterday showed.

The cumulative foreign direct investment (FDI) net inflows in 2015 were lower than the $5.74 posted in 2014 as well as the $6-billion goal for the year.

According to the BSP, last year’s total FDI was pulled down by declines in debt instruments (down 3.9 percent year-on-year to $3.1 billion) and reinvestment of earnings (down 14.8 percent to $747 million).

Net placements in equity capital, meanwhile, rose 15.1 percent to $1.8 billion.

The bulk of equity capital placements came from investors from Japan, the Netherlands, Singapore, the United Kingdom and the United States.

The majority of the foreign equity capital investments were poured into construction activities, financial and insurance, manufacturing, real estate, as well as wholesale and retail trade.

During the month of December, net FDI inflows also dropped by 51.3 percent to $273 million from $561 million a year ago, the lowest in nine months.

Despite the year-on-year drop, the FDIs generated last December was attributed by the BSP to sustained positive investor sentiment “amid the country’s favorable growth prospects.”

In December, more than half of the FDIs were net investment in debt instruments, which increased 616.6 percent to $140 million from $20 million a year ago.

Net equity capital infusion hit $77 million as placements worth $97 million offset $20 million in withdrawals.

The equity placements that flowed in last December were invested in administrative and support services activities; electricity, gas, steam and air conditioning supply; financial and insurance; manufacturing, and real estate. The top sources of these capital investments were Japan, the Netherlands, Singapore, South Korea and the United States.

Reinvestment of earnings, meanwhile, reached $56 million, down 6.5 percent from $60 million in 2014.

This year, the BSP expects FDI to increase to $6.3 billion. Ben O. de Vera