April FDI dip on global slowdown, inflation


THE Philippines’s foreign direct investments (FDI) contracted anew in April on the back of a global economic slowdown and high inflation, according to the Bangko Sentral ng Pilipinas (BSP).

BSP data showed FDIs contracted 14.1 percent to $876 million worth of net inflows in April 2023 from $1 billion in April 2022.

The year-to-date FDI net inflows reached $2.9 billion, an 18-percent contraction from the $3.6 billion recorded in the comparable period in 2022.

“The decline in FDI may be attributed to concerns over slowing economic growth and relatively high inflation levels globally,” BSP said.

The data showed that in terms of components, net investments in debt instruments, which declined by 7.7 percent to $663 million, continued to comprise most of the country’s FDI for the period.

Net equity investments other than reinvestment of earnings registered the highest decline of 33.8 percent to $136 million.

Bulk of the equity capital placements during the month came from Japan, the United States and Singapore.

The investments were channeled mostly to the manufacturing; real estate; and financial and insurance industries.

BSP explained that FDI are compiled based on the Balance of Payments and International Investment Position Manual, 6th Edition (BPM6).

FDI includes investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and investment made by a non-resident subsidiary/associate in its resident direct investor.

BSP also said FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.

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