Foreign direct investments (FDI) that fell at an annual clip of 34 percent in May continued to fall in June but at a significantly moderate rate of only 3.9 percent in June, the Bangko Sentral ng Pilipinas (BSP) said on Monday.
These are those investments that are encouraged to come to the Philippines and chose to stay for the long haul rather than come on the basis of opportunity and leave at the merest sign of domestic trouble or hint of better opportunities elsewhere.
According to the BSP, the net inward flow of foreign investments aggregated only $484 million in June from $503 million last year resulting from net residents’ investment in equity capital falling nearly 12 percent lower to $111 million this year from last year’s $126 million.
The non-residents also reinvested fewer of their locally generated earnings this time around, which stood 26.8 percent lower to only $89 million from last year’s $122 million.
Net investments in debt instruments also increased by 11 percent to $283 million in June this year from only $255 million.
While the year ago foreign direct investments came mostly from Germany, Japan and the United States, this year’s batch of foreign investors were from Japan, the United States and Singapore and plowed into the manufacturing sector, real estate and in the information and communication sector.
As a result, the six-months FDI fell 20.4 percent to $3.9 billion from last year’s $4.9 billion that the BSP attributed to persistent global uncertainties that translate to weaker-than-projected growth prospects for the $404 billion Philippine economy.
“The slowdown in FDI may be due largely to investor concerns over weak growth prospects amid persistent global uncertainties,” the BSP said.
Governments around the world would rather that foreign fund managers invest for the long haul when their local exposure generates jobs for Filipinos and contribute to the nation’s coffers in the form of tax.
