Foreign investments drop 9% in 9 months
MANILA, Philippines — More foreign direct investments (FDIs) flowed out of the country in September, ending four consecutive months of double-digit year-on-year growth as the re-imposition of stricter lockdowns in August dampened investor sentiment, the Bangko Sentral ng Pilipinas (BSP) said yesterday.
As a result, the net inflow of FDIs contracted by 8.6 percent to $4.83 billion from January to September compared to $5.29 billion in the same period last year.
“The decline in FDI inflows reflected the worldwide cautious investment climate, following the continued effects of the prolonged COVID-19 health crisis on the global economic outlook,” the BSP said.
Equity capital from Japan, the Netherlands, US, and Singapore that went to manufacturing, real estate as well as financial and insurance industries rose by 6.4 percent to $1.35 billion from January to September compared to $1.14 billion in the same period last year.
On the other hand, withdrawals plunged by 75 percent to $151 million from $620 million.
Net investment in debt instruments consisting mainly of loans extended by parent companies abroad to their local affiliates declined by 22 percent to $2.99 billion from $3.84 billion.
Likewise, reinvestment of earnings also retreated by 20.5 percent to $639 million from $804 million.
For September alone, the BSP said net FDI inflows declined by 12.3 percent to $523 million from $596 million.
“The two-week modified enhanced community quarantine in Metro Manila and surrounding areas in the first half of August may have dampened investor sentiment on prospects of the economy’s reopening,” the BSP said.
After partially reopening the economy in June with the shift of the National Capital Region (NCR) to general community quarantine, Metro Manila and nearby provinces reverted to stricter quarantine measures from Aug. 4 to 18 as the COVID-19 cases doubled to 200,000.
Data showed capital infusions from Japan, the US, and Singapore channeled to manufacturing, real estate as well as
financial and insurance industries decreased by 8.6 percent to $114 million in September from $125 million in the same month last year, while withdrawals fell by 46.5 percent to $15 million from $28 million.
Reinvestment of earnings declined by 19.7 percent to $62 million from $77 million, while net investments in debt instruments retreated by 14.3 percent to $362 million from $423 million.
The BSP expects a higher net FDI inflow of $5.6 billion this year before increasing to $7 billion next year. FDI inflows into the country steadily declined after hitting a record $10.3 billion in 2017
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