The Philippines started on the wrong foot as foreign direct investments (FDIs) that entered the country nosedived by 45.7 percent to a 20-month low of $448 million in January, from $824 million in the same month last year.
“FDI net inflows declined during the month amid global economic uncertainties and high inflation, which continued to weigh on investor decisions,” the Bangko Sentral ng Pilipinas (BSP) said.
This was the lowest FDI inflow since the $426 million recorded in May 2021.
This resulted from the 56.6 percent drop in non-residents’ net investments in debt instruments and equity capital to $280 million from $645 million as intercompany borrowing between foreign direct investors and their subsidiaries or affiliates in the Philippines fell significantly.
The BSP data also showed a 6.2 percent decline in equity and investment fund shares to $93 million from $107 million.
Equity inflows from Japan, Singapore, and the United States invested in the manufacturing, real estate as well as financial and insurance sectors jumped by 26.3 percent to $149 million in January from $118 million in the same month last year.
On the other hand, withdrawals amounted to $56 million or 414 percent higher than the $11 million last year.
Meanwhile, the central bank said non-residents’ reinvestment of earnings increased slightly by 4.1 percent to $75 million from $72 million.
The central bank expects the net inflow of FDIs rising to $11 billion this year and further to $12 billion next year after declining by 23.2 percent to $9.2 billion last year from a record high of $11.98 billion in 2021.
