FDIs to PH beat 2021 goal in Sept

The Bangko Sentral ng Pilipinas (BSP) is ratcheting up its full-year target for foreign direct investments (FDIs) as January-September net inflows jumped 44 percent year-on-year to $7.3 billion, breaching the $7-billion goal for 2021.

“We’re revising it [2021 goal],” BSP Governor Benjamin Diokno told reporters. “The revised number will be announced next week, if not sooner.”

According to the BSP, the net inflow of long-term capital grew for the fourth month in a row in September, by 30 percent year-on-year to $660 million from $506 million in the same month last year.

“This was mainly on account of the 78.6 percent increase in nonresidents’ net investments in debt instruments to $5.3 billion from $3 billion last year,” the regulator said in a statement, referring to the nine-month data.

Also, reinvestment of earnings jumped 12 percent to reach $865 million from $770 million, previously.

At the same time, nonresidents’ net investments in equity capital—other than reinvestment of earnings—fell by 15.7 percent to $1.1 billion for the nine months from $1.3 billion.

Net investments in equity capital declined as placements shrank by 8.1 percent to $1.5 billion from $1.6 billion while withdrawals surged by 31 percent to $337 million from US$258 million.

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A big portion of the equity capital placements flowed in from Singapore, Japan, the United States and the Netherlands.

These were placed mostly in the industries of manufacturing; financial and insurance; electricity, gas, steam, and air-conditioning; and real estate.

In September alone, FDI net inflows increased along with a 60-percent rise in nonresidents’ net investments in debt instruments—$538 million from $336 million.

Similarly, reinvestment of earnings in September grew by 25 percent to $89 million from $71 million.

On the other hand, nonresidents’ net investments in equity capital—other than reinvestment of earnings—declined by 67 percent to $32 million from $99 million in September 2020.

This was attributed to the 22-percent decrease in equity capital placements ($88 million from $114 million) along with a 270-percent surge in equity capital withdrawals.