Metro Manila (CNN Philippines, January 26) — The Philippines is the sole Southeast Asian economy to see foreign direct investments expand in 2020 despite the pandemic, according to a recent report of the United Nations Conference on Trade and Development or UNCTAD.
In its latest Investment Trends Monitor release, the UNCTAD said foreign investments in the subregion shrank last year by 31% annually to $107 billion. It attributed the decrease to lesser inflows to major recipient countries in Southeast Asia.
The Philippines, however, saw its FDIs grow in the year by 29% to $6.4 billion, which the UN body described as “bucking the trend.”
“Economies locally and in many countries around the world have further picked up and reopened from lockdowns/stay-at-home orders, thereby allowing more inflows of FDIs into the Philippines, said RCBC chief economist Michael Ricafort, adding these had been facilitated by improvements in global supply chains and logistics.
Ricafort also cited low interest rates locally and worldwide as another possible factor, noting this would make borrowing “more compelling” for finance investments including those for FDIs across the globe.
Meanwhile, inflows in Singapore dropped by 37% to $58 billion, Indonesia by 24% to $18 billion, and Vietnam by 10% to $14 billion. Malaysia also posted a negative growth of 68%, raking in $2.5 billion in foreign investments during the year. Thailand, on the other hand, posted a 50% drop in FDIs to $1.5 billion.
Developing Asia, on the other hand, contracted by 4%. This led to an estimated $476 billion in total foreign investments for 2020, the “mildest” fall among all regions, the report read. This is supported by East Asia, which posted a 12% growth during the period, reaching $283 billion in FDIs. The UNCTAD attributed this to financial flows bouncing back in Hong Kong, China after unrests caused 2019’s exceptionally low figures.
China recorded investment flows of $163 billion in 2020, up by 4% the year prior, making it the largest recipient during the year, UNCTAD said.
FDIs around the globe “collapsed” last year, the report found. Figures were estimated to have fallen to $859 million, 42% down from the $1.5 trillion logged in 2019.
