FDI falls 20.4% in first half of 2023

Metro Manila (CNN Philippines, September 11) — Foreign direct investments (FDI) into the country fell 20.4% to US$3.911 billion (₱221.9 billion) in the first half of the year, the Bangko Sentral ng Pilipinas said on Monday.

The BSP noted the plunge from the US$4.9 billion net inflows recorded in the same period in 2022 "may be due largely to investor concerns over weak growth prospects amid persistent global uncertainties."

Inflows for June, meanwhile, fell to a five-month low since January, central bank data showed.

"Foreign direct investment recorded US$484 million (₱27.4 billion) net inflows in June 2023, lower by 3.9 percent from the US$503 million (₱28.5 billion) net inflows in the same month last year," the BSP added in a statement.

The bank said this was due to the recorded declines in non-residents’ net investments in equity capital and their reinvestment of earnings, by 11.8% and by 26.8%, respectively.

Net investments in debt instruments, meanwhile, rose by 11% at US$283 million from US$255 million.

The BSP said FDI includes investment made by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10%, and an investment made by a non-resident subsidiary/associate in its resident direct investor. FDIs can be in the form of equity capital, reinvestment of earnings, and borrowings.

Most of the equity capital placements in June 2023 were from Japan, the United States, and Singapore. The BSP said these were infused largely into manufacturing, real estate, and information and communication industries.