January FDI inflows fall to $448M


The foreign direct investments (FDIs) booked by the Philippines reached only $448 million in January, according to data released by the Bangko Sentral ng Pilipinas (BSP).

The January figure was the lowest net FDI inflows recorded by the Philippines since May 2021, when net inflows reached $426 million.

Net FDI inflows during the month contracted by 45.7 percent from the previous year’s $824 million.

“This resulted from the decrease in non-residents’ net investments in debt instruments and equity capital,” the BSP said. “FDI net inflows declined during the month amid global economic uncertainties and high inflation, which continued to weigh on investor decisions.”

The data showed that debt instruments contracted 56.6 percent to $280 million in January 2023 from $645 million in January 2022.

BSP also said equity other than reinvestment of earnings declined 13.1 percent to only $93 million in January 2023 from $107 million in January 2022.

However, BSP said, non-residents’ reinvestment of earnings increased slightly. There was a 4.1 percent increase in reinvestment of earnings to $75 million in January from $72 million in January 2022.

“By country source, equity capital placements came mostly from Japan, Singapore, and the United States. These were invested largely in the manufacturing, financial and insurance, and real estate industries,” BSP said.

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

FDI includes an investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent.

This can also be 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.

The BSP FDI statistics are distinct from the investment data of other government sources. BSP FDI covers actual investment inflows.

By contrast, the approved foreign investments data that are published by the Philippine Statistics Authority (PSA), which are sourced from Investment Promotion Agencies (IPAs), represent investment commitments, which may not necessarily be realized fully, in a given period.

Further, the said PSA data are not based on the 10 percent ownership criterion under BPM6. Moreover, the BSP’s FDI data are presented in net terms (i.e., equity capital placements less withdrawals), while the PSA’s foreign investment data do not account for equity withdrawals.