Metro Manila (CNN Philippines, November 10) — Foreign direct investments (FDI) continued to grow by almost 47% in August as investors warm up to the government’s stimulus measures and further relaxation of quarantine restrictions across the country.
The Bangko Sentral ng Pilipinas (BSP) said on Tuesday that FDI for that month was at $637 million, up from the previous year’s $434 million and also marking its fourth consecutive month of growth.
The BSP attributed this to the “investors’ renewed confidence at the national government’s fiscal stimulus and BSP’s accommodative monetary policy stance” coupled with the relaxation of community restrictions to help address the impact of the COVID-19 pandemic.
However, considering the cumulative data for the first eight months of the year, this contracted by 5.6% to $4.4 billion compared to $4.7 billion net inflows in the previous year.
The BSP noted that net inflows in debt instruments and equity capital investments helped narrow down the contraction.
In August alone, it noted that total investments in debts instruments grew 72% to $458 million, while equity capital investments jumped 32% to $107 million.
This as the growth in equity capital placements at 30% to $118 million more than offset withdrawals that grew 7% to $10 million.
Top sources of capital during the period were Japan, the United States, and the British Virgin Islands that were mainly used in manufacturing, real estate, financial and insurance, and professional, scientific, and technical industries.
Meanwhile, reinvested earnings declined 17% to $71 million, versus last year’s $86 million.
Prior to the pandemic, the BSP projected total FDI to reach $8.8 billion this year. However, due to lockdowns in countries across the globe that also slowed down economic activity, the BSP expects it to ease this year as investors hold on to cash during this time.
