FDI net inflows up 48.3%to $989M in April–BSP

LONG-TERM investments made by foreign investors to the Philippines surged in April this year, the highest since December last year, the Bangko Sentral ng Pilipinas (BSP) reported.

Data released by the Central Bank showed that foreign direct investments (FDI) net inflows grew 48.3 percent from last year, to reach $989 million in April 2022 from the $667-million net inflows recorded in the same month last year.

In December 2021, FDI net inflows grew 59 percent. However, in April 2021, investments made by foreign investors posted a growth of 112.6 percent.

“This [surge in April FDI net inflows] positive development brought the FDI net inflows for the first four months of the year to $3.4 billion, higher by 12.1 percent than the $3.1 billion net inflows in January-April 2021,” BSP said.

In April 2022, net inflows of FDI rose following the increases recorded across all components, led by non-residents’ net investments in debt instruments which posted growth of 40.6 percent.

BSP said data showed equity capital placements also expanded, mostly investments from Malaysia, the United States and Japan.

These were channeled primarily to the construction; real estate; professional, scientific, and technical;and manufacturing industries, the Central Bank said.

Cumulative FDI net inflows rose due mainly to the 35.3-percent increase in non-residents’ net investments in debt instruments, according to the BSP.

However, reinvestment of earnings posted a cumulative growth of 0.9 percent while net equity other than reinvestment of earnings contracted 37.2 percent.

Unctad warning

Earlier, the United Nations Conference on Trade and Development (Unctad) warned that global foreign direct investment (FDI) flows in 2021 were unlikely to be sustained due to the recent global economic issues such as the war in Ukraine.

Unctad’s 2022 World Investment Report noted that global FDI flows in 2021 hit $1.58 trillion, higher by 64 percent from the exceptionally low level in 2020.

However, the global environment for International business and cross-border investment changed dramatically in 2022, with the war in Ukraine “on top of the lingering effects of the pandemic—is causing a triple food, fuel and finance crisis in many countries around the world.”

With this, the Unctad stressed, investor uncertainty could put significant downward pressure on global FDI in 2022. (Full story here: https://businessmirror.com.ph/2022/06/09/global-fdi-flows-in-2021-wont-likely-be-sustained-unctad/)