Net FDI inflows drop in January
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Wed, 10 Apr 2019 16:24:08 +0000
NET foreign direct investments (FDI) hit a two-month low in January, also dropping from a year earlier, the Bangko Sentral ng Pilipinas (BSP) announced on Wednesday.
At $609 million, down 38.2 percent from $986 million in the same month last year, the result was lowest since November 2018’s $535 million.
The central bank said the year-on-year decline “reflected the 65.3 percent drop in equity capital placements to $184 million during the month from $531 million for the same period a year ago.”
Equity capital placements during the month came mainly from Mauritius, South Korea, the United States, Singapore and the Netherlands, and were channeled largely to the financial and insurance; administrative and support services; real estate; electricity, gas, steam and air-conditioning supply; and information and communication industries.
ING Bank Manila Branch senior economist Nicholas Antonio Mapa said the overall slowdown could mean that investors were turning more cautious.
“Investors may want more clarity on growth prospects and may also be awaiting the outcome of the [May 13] elections before coming into the company but the corporates that currently have operations onshore appear to still be upbeat on the economy’s prospects,” he noted.
Meanwhile, an increase in equity capital withdrawals — mainly from Japan — to $229 million from $58 million a year earlier contributed to the decrease in net FDI. This resulted in a net equity capital outflows of $45 million during the month, a reversal from the $473-million net inflow a year ago.
Net investments in debt instruments — intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines — increased by 31 percent to $577 million from the year-ago $441 million.
Reinvestment of earnings also rose by 6.6 percent to $76 million from a year ago.
The Bangko Sentral expects net FDI inflows to reach $10.2 billion this year.
In 2018, net FDI inflows hit a two-year low of $9.802 billion — short of the central bank’s $10.4-billion goal and the lowest since 2016’s $7.933 billion — down 4.4 percent from 2017’s $10.256 billion.
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