Foreign direct investments (FDI) flowed inward on net basis last year to $9.2 billion, sharply lower than in 2021 when this aggregated $12 billion.
In December alone, the Bangko Sentral ng Pilipinas (BSP) reported that FDI, the kind of foreign capital that stays for the long-haul unlike portfolio investments or “hot” money that fly away at the merest sign of trouble or better yield elsewhere, fell by more than 76 percent to only $634 million from $2.66 billion twelve months earlier.
The BSP said the decline is attributable to so-called base effect, “particularly given the significantly larger net placements of equity capital in December 2021. Non-residents’ net investments in debt instruments likewise declined in December 2022 while reinvestment of earnings remained broadly stable.”
This development is an affirmation of FDIs averaging only $450.78 million from 2005 to 2022 when these investments hit record net inflows of $2.675 billion in December 2021 that reverted to net outflows totaling $396 million in 2007.
This much volume of FDIs invested in the Philippines contrasts starkly against foreign investment numbers reported by Malaysia, Myanmar, Vietnam, Lao PDR, Cambodia and Singapore which all reported far more foreign direct investments as percent of local output measured as the gross domestic product (GDP) from 2015 to 2022.
The country’s FDI performance during the period proved only superior against Brunei, Indonesia and Thailand based on data reported by the World Bank.
According to the BSP, the bulk of investments from Singapore, Germany and Japan were poured into the manufacturing sector and in real estate.
The full year FDI of $9.2 billion were the non-residents’ net investments in debt instruments and equity capital in enterprises that increased slightly to $1.162 billion or 6 percent higher than only $1.097 a year earlier.
