The Philippines experienced a decrease in net foreign direct investments (FDI) in November 2023, compared to both the previous month and the same period last year. Despite the decline, year-to-date FDI remained positive. The Bangko Sentral ng Pilipinas (BSP) attributed the November dip to a contraction in debt instrument investments and a significant drop in equity capital investments.
Net foreign direct investments (FDIs) remained positive in November but were considerably lower compared to the previous month and a year earlier, according to a report released by the Bangko Sentral ng Pilipinas ( BSP ) on Monday. The net inflow amounted to $901 million, representing a 19.8 percent decrease from $1.1 billion recorded in November 2022 and an 11.8 percent decline from $1.02 billion in October 2023. Despite this monthly dip, net FDI for the year-to-date stood at 4.
4 percent higher at $8.6 billion compared to $8.2 billion in the same period last year. The BSP attributed the November decline to a 17.9 percent contraction in nonresidents' net investments in debt instruments, which fell to $791 million from $964 million a year ago. Net investments in equity capital also experienced a significant plunge, dropping by 58.9 percent to $35 million from $85 million. However, reinvestments of earnings showed a slight uptick, edging up by 1.1 percent to $74 million.Major contributors to November's investments included Japan (49 percent), the United States (24 percent), and Singapore (17 percent). These investments were predominantly channeled into the manufacturing (49 percent), real estate (25 percent), financial and insurance (9.0 percent), and administrative and support service (5.0 percent) industries. Year-to-date, equity capital placements surged to $1.49 billion from $1.08 billion in the previous year, while reinvestments of earnings moderated to $1.11 billion from $1.15 billion. Net investments in debt instruments also saw a slight decrease, falling to $5.98 billion from $5.99 billion. January-November placements originated primarily from Japan (39 percent), the United Kingdom (39 percent), the United States (10 percent), and Singapore (5.0 percent). The majority, or 72 percent, of these investments flowed into the manufacturing sector, followed by real estate (12 percent) and wholesale and retail trade (4.0 percent). Rizal Commercial Banking Corp. chief economist Michael Ricafort suggested that the decline could be attributed to concerns surrounding potential US protectionism following Donald Trump's re-election as president. Ricafort argued that Trump's efforts to retain production and jobs within the US 'could reduce foreign investments globally'
FOREIGN DIRECT INVESTMENT PHILIPPINES BSP INVESTMENT TRENDS ECONOMIC OUTLOOK
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