LONG-TERM investments made by foreign investors to the Philippines grew strongly in November last year as global and local economic activity improved during the period, bringing the cumulative January-November 2021 FDI net inflows to $9.2 billion, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.
Foreign direct investment (FDI) net inflows posted a 96-percent increase in November 2021 to reach $1.1 billion during the month.
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 create jobs for Filipinos and have a multiplier effect on the economy.
The strong November performance of FDI inflows to the country brought the cumulative FDI net inflows in January to November 2021 to $9.2 billion, a 52.5-percent growth from the $6.1-billion net inflows in the same period in 2020.
Broken down, foreign investors’ net investments in debt instruments climbed 82.1 percent to $6.8 billion in the first 11 months of the year, from the $3.8 billion in the comparable period in 2020.
Reinvestment of earnings, meanwhile, rose by 12.8 percent to $1 billion from the $907 million recorded in the first 11 months of 2020.
Meanwhile, the growth in FDI inflows could have been larger, if not moderated by the contraction in foreign investors’ net investments in equity capital by 1.2 percent to $1.4 billion.
The BSP said the bulk of the equity capital placements during the period were sourced from Singapore, Japan, and the United States. These were invested mostly in the manufacturing; financial and insurance; electricity, gas, steam, and air-conditioning; and real estate industries.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the country’s strong FDI performance has been vital to the economy’s recovery from the pandemic-related disruptions.
“FDIs remain one of the bright spots and one of the major pillars of the economic recovery program from Covid-19,” Ricafort said. “Encouraging more FDIs into the country is a pillar in the country’s economic recovery program since they create more employment and other business activities in the country.”
In the coming months, Ricafort said more FDIs into the Philippines would be sustained by the BSP’s continued accommodative monetary policy stance, passage of reform measures, and a continued pick up in local and global economic activity.
The strong November performance of FDI inflows to the country brought the cumulative FDI net inflows in January to November 2021 to $9.2 billion, a 52.5-percent growth from the $6.1-billion net inflows in the same period in 2020.
Broken down, foreign investors’ net investments in debt instruments climbed 82.1 percent to $6.8 billion in the first 11 months of the year, from the $3.8 billion in the comparable period in 2020.
Reinvestment of earnings, meanwhile, rose by 12.8 percent to $1 billion from the $907 million recorded in the first 11 months of 2020.
Meanwhile, the growth in FDI inflows could have been larger, if not moderated by the contraction in foreign investors’ net investments in equity capital by 1.2 percent to $1.4 billion.
The BSP said the bulk of the equity capital placements during the period were sourced from Singapore, Japan, and the United States. These were invested mostly in the manufacturing; financial and insurance; electricity, gas, steam, and air-conditioning; and real estate industries.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the country’s strong FDI performance has been vital to the economy’s recovery from the pandemic-related disruptions.
“FDIs remain one of the bright spots and one of the major pillars of the economic recovery program from Covid-19,” Ricafort said. “Encouraging more FDIs into the country is a pillar in the country’s economic recovery program since they create more employment and other business activities in the country.”
In the coming months, Ricafort said more FDIs into the Philippines would be sustained by the BSP’s continued accommodative monetary policy stance, passage of reform measures, and a continued pick up in local and global economic activity.
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