FDI net inflows in first 8 months reach $6.4B

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THE country’s foreign direct investment (FDI) net inflows in August 2021 have expanded 19.8 percent year-on-year to reach US$812 million from US$677 million in the same period in 2020.

This development brought the FDI net inflows for the first eight months of the year to $6.4 billion, higher by 39.7 percent than the $4.6 billion net inflows in the comparable period in 2020, the Bangko Sentral ng Pilipinas said.

The cumulative FDI net inflows rose on the back of the

71.6 percent growth in non-residents’ net investments in debt instruments to $4.5 billion from $2.6 billion. Likewise, reinvestment of earnings rose by 11.0 percent to $776 million from the $699 million registered last year.

However, non-residents’ net investments in equity capital (other than reinvestment of earnings) declined by 12.2 percent to $1.1 billion, from $1.2 billion a year ago.

Net investments in equity capital fell as placements dropped by 8.2 percent to $1.4 billion (from $1.5 billion) and withdrawals increased by 12.1 percent to $272 million (from $243 million).

Equity capital placements were sourced primarily from Singapore, Japan and the United States. These were channeled mainly in the manufacturing, financial and insurance, electricity, gas, steam and air-conditioning and real estate industries.

August performance

For the month of August 2021, the expansion in FDI net inflows was driven by non-residents’ net investments in debt instruments, which grew by 38 percent year-on-year to $636 million from $461 million in August 2020.

Meanwhile, reinvestment of earnings contracted by 24.7 percent to $99 million from $132 million.

Likewise, non-residents’ net investments in equity capital declined by 9.7 percent to $77 million from $85 million in August 2020. This was due to the rise in equity capital withdrawals (by 51.2 percent to $50 million from $33 million), which more than offset the increase in equity capital placements (by 7.3 percent to $126 million from $118 million).

Equity capital placements during the month originated mostly from Japan, the Netherlands and the United States. These were directed largely to the manufacturing, information and communication and real estate industries. (PR)

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