11-month FDIs still down despite November net inflows — BSP

Foreign businessmen brought in more long term equity investments to the Philippines in November, but still no not enough to reverse the decline recorded in the first 11 months of last year, according to the latest data from the Bangko Sentral ng Pilipinas.

In a statement, the central bank said foreign direct investments posted $623 million in net inflows in the penultimate month of 2019, representing a 14.6 percent increase from the $543 million net inflows in the comparable period in 2018.

“This was due mainly to the increases posted in all foreign direct investment components,” the BSP said.

“In particular, net investments in debt instruments, consisting mainly of intercompany borrowing or lending between foreign direct investors and their subsidiaries or affiliates in the Philippines recorded net inflows of $380 million from $341 million in November 2018,” the central bank said.

Similarly, 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 were sourced mainly from the US, Thailand, Japan and South Korea. These investments were channeled mostly to the financial and insurance, and real estate industries.

From January-November 2019, however, foreign direct investment net inflows amounted to $6.4 billion — a decline of 29.9 percent from the $9.2 billion recorded in the comparable

period in 2018.

“Concerns over the global economic outlook continued to curb foreign direct investments as investor confidence remained muted. Non-residents’ net investments in debt instruments declined by 25.2 percent to $4.7 billion,” the central bank said.

Likewise, net equity capital investments contracted by 60.4 percent to $845 million.

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 the US$798 million registered in the first eleven months of 2018, the data showed.

Edited by TSB