Net FDI as of Nov ’21 rose 52% to $9.2B

Net inflows of foreign direct investments (FDI) from January to November 2021 surged by 52 percent year-on-year to $9.2 billion, further exceeding expectations for the full year which the Bangko Sentral ng Pilipinas (BSP) initially set at $7 billion.

BSP data also showed that the net inflow of long-term capital grew for the sixth month straight in November, almost doubling to $1.1 billion, which was up 96 percent from $559 million in the same month of 2020.

The 2021 goal for net FDI was surpassed as early as September, which saw a nine-month net inflow of $7.3 billion. Last December, BSP officials said the full-year results could reach at least $8 billion.

On Thursday, the central bank said January-November net inflows were buoyed further by an 82-percent growth in nonresidents’ net investments in debt instruments. This component of FDI climbed to $6.8 billion from $3.8 billion.

Also, reinvestment of earnings grew by 13 percent to $1 billion from the $907 million. However, nonresidents’ net investments in equity capital—other than reinvestment of earnings—decreased by 1 percent to $1.4 billion.

A big chunk of the equity capital placements during the 11-month period flowed in from Singapore, Japan and the United States. These were invested mostly in manufacturing; financial and insurance; electricity, gas, steam and air-conditioning; and real estate.

In November alone, FDI net inflows increased along with a 109-percent year-on-year expansion in nonresidents’ net investments in debt instruments—$896 million from $428 million.

At the same time, nonresidents’ net investments in equity capital—other than reinvestment of earnings—jumped by 79 percent to $118 million from $66 million in November 2020.

Growth in November was driven by a 40-percent surge in equity capital placements—$132 million from $96 million—along with a 53-percent drop in equity capital withdrawals—$14 million from $30 million.

Last November, equity capital placements mainly came from the United States and Japan. These were channeled primarily to manufacturing; financial and insurance; and real estate industries.

Further, reinvestment of earnings last November grew by 25 percent to $81 million from $64 million.