By Lee C. Chipongian
The country’s net foreign direct investments (FDI) as of end-April amounted to $2.9 billion, down 14 percent year-on-year from $3.4 billion, the Bangko Sentral ng Pilipinas (BSP) said.
For the month of April, net FDI inflows was at $961 million, also lower by 11.8 percent from $1.1 billion same time in 2019.
The BSP however said that in April, all FDI components such as equity capital, reinvestment of earnings and borrowings between affiliates all registered positive balances.
BSP Governor Benjamin E. Diokno said since the BSP’s 2019 estimate for net FDI is a minimum of $9 billion, they are positive about FDI growth since “it could be higher”.
“We’re very comfortable,” he said, citing that the country’s steady sources of inflows such as remittances, BPOs and tourism receipts.
Diokno said globally, the trend is a slowing FDI flows, that in other countries, FDI is declining. For the Philippines it is the opposite.
He said FDI here is increasing — “that shows confidence (in the Philippines).” He said because of the recent credit rating upgrade including S&P Global, the declining inflation, among others, there is “renewed confidence” in the country’s growth prospects and this confidence, he said, is increasing.
“We’re doing great,” said Diokno. Last year, net FDI reached $9.8 billion. The previous projection for net FDI was $10.2 billion for 2019 but the BSP recasted its estimate due to the volatile global economy and markets.
In a statement, the BSP said that net inflows of net equity capital in April slipped by 85.5 percent to $39 million from $272 million same time in 2018.
“Equity capital placements emanated largely from Thailand, the US, Singapore, Hong Kong, and Japan. These were channeled mainly to (these sectors): financial and insurance; real estate; manufacturing; electricity, gas, steam and air-conditioning supply; and construction industries.
The BSP said non-residents’ investments in debt instruments — mainly loans extended by parent companies abroad to their local affiliates – went up by 12.6 percent year-on-year to $830 million. Reinvestment of earnings reached also increased by 14 percent to $92 million.
For the January-April FDI of $2.9 billion which was lower than last year’s $3.4 billion net inflows, the BSP said this was “on account of the decline in net equity capital investments as placements (which) dropped by 44.5 percent to $712 million from (and) coupled with a 204.9 percent increase in withdrawals to $377 million from $124 million during the period.”