Uncertainties in the global economy continued to pummel the country’s Foreign Direct Investments (FDI) in August.
Data from the Bangko Sentral ng Pilipinas (BSP) showed net FDI inflows declined 0.3 percent to $789 million in August 2023 from $792 million in August 2022.
Nonetheless, BSP said FDI net inflows amounted to $5.5 billion, a 12.9 percent decline from the $6.3 billion recorded in the same period last year.
“The continued FDI net inflows reflect the country’s strong macroeconomic fundamentals. Nonetheless, the recorded slowdown may be due largely to investor concerns following the sustained uncertainty surrounding the global economy,” the BSP said.
The decline in FDI net inflows reflected the 7.8 percent contraction in nonresidents’ net investments in debt instruments to $537 million in August 2023 from $582 million in August 2022.
However, this decline was tempered by the expansion in nonresidents’ net investments in equity capital by 13.3 percent to $36 million from $31 million, and their reinvestment of earnings by 21.4 percent to $217 million from $179 million.
In August, equity capital placements emanated mostly from Japan, the United States, and Singapore. These were channeled primarily to the manufacturing; wholesale and retail trade; and information and communication industries.
The BSP said FDI includes investment by a nonresident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and investment made by a nonresident subsidiary/associate in its resident direct investor. FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.
The FDI statistics from BSP are distinct from the investment data of other government sources. BSP FDI covers actual investment inflows.
By contrast, the approved foreign investments data that are published by the Philippine Statistics Authority (PSA), which are sourced from Investment Promotion Agencies (IPAs), represent investment commitments, which may not necessarily be realized fully, in a given period.