Job-creating long term equity investments in the Philippines dropped sharply in August and declined by almost as much in the first eight months of the year, as global economic uncertainties dampened foreign businessmen’s sentiment toward the country, the central bank said.
According to the Bangko Sentral ng Pilipinas (BSP) at least $416 million in foreign direct investments flowed into the country, but it was 45.1 percent lower than $758 million in 2018.
A large part of net investment in August were on debt instruments—mainly inter-company borrowings or lending between foreign direct investors and subsidiaries or affiliates.
These reached $263 million in 2019 compared to $534 million in 2018.
Net equity capital investments by nonresidents fell by 55.3 percent to $77 million from $172 million in 2018.
Equity capital placements during the period came mostly from Japan, the United States, Hong Kong, Cayman Islands and Singapore.
These investments were channeled mainly to manufacturing; real estate; financial and insurance; information and communication; and wholesale and retail trade industries.
Earnings reinvested in the country, however, rose by 46 percent to $77 million from just $53 million in 2018.
Total foreign direct investment since January 2019 was lower by 39.7 percent, or $4.5 billion, from $7.5 billion in 2018.
The BSP blamed this on “ongoing uncertainty in the global environment.” It said investment plans had been put on hold as a result./TSB