FOREIGN direct investments (FDI) to the country grew strongly at the end of the third quarter of the year, surpassing the target set for the year by the national government.
The Bangko Sentral ng Pilipinas (BSP) reported on Friday that FDI to the Philippines hit $7.29 billion by the end of September this year, rising by 43.8 percent from the $5.07 billion in the same nine-month period in 2020.
The FDI net inflows for the first nine months of the year have already surpassed the $7- billion target set by the government earlier this year.
FDI are investments made by foreign players to the Philippines in the hopes of long-term return. Since these are in the country for a longer-term compared to their short-term counterpart, the foreign portfolio investments (FPI), FDI usually creates jobs for Filipinos and have a multiplier effect on the economy.
In line with this, BSP Governor Benjamin Diokno said they will be revising their FDI assumption for the country for 2021 and will be announcing it within the month.
In September alone, FDI to the country reached $660 million, up 30.4 percent from the $506-million net inflows in September 2020.
The BSP said FDI net inflows in September 2021 rose on the back of the 60.2-percent increase in non-residents’ net investments in debt instruments to $538 million from $336 million in the same month last year.
Likewise, reinvestment of earnings grew by 25.2 percent to $89 million from $71 million.
However, non-residents’ net investments in equity capital declined by 67.4 percent to $32 million during the month from $99 million in September 2020.
The BSP attributed this to the decrease in equity capital placements, coupled with the expansion in equity capital withdrawals.
Data from the Central Bank also showed that equity capital placements during the month came largely from Japan, the United States, Hong Kong, Indonesia and Singapore.
These were channeled mainly to the manufacturing; real estate; professional, scientific and technical; and construction industries.