Foreign direct investments down 67.9% to $311M net inflow in April

Foreign direct investments (FDI)—investments made by foreign companies or individuals in the Philippines— stood at a net inflow of $311 million in April, although lower by 67.9% from $971 million net inflow in the same period last year, the Bangko Sentral ng Pilipinas (BSP) reported Wednesday.

“The slowdown in FDI inflows reflected the continued weak global and domestic demand prospects prompting many investors to put on hold  investment plans amid the unresolved COVID-19 pandemic,” the BSP said.

The central bank noted that the decline in FDI net inflows in April resulted from lower net investments in debt instruments, which declined by 73.2% to $223 million, and in equity capital, which decreased by 82.6% to $7 million.

“In particular, equity capital placements declined by 68.3% to $47 million from $147 million,” it said.

The BSP said the bulk of the equity capital placements were sourced from Japan, the United States, Singapore, and Germany.

Said investments were channeled  mostly to the manufacturing, wholesale and retail trade, and real estate industries.

Meanwhile, reinvestment of earnings decreased by 15.8% to $81 million from $96 million in the same period last year.

For the first four months of 2020, FDI net inflows amounted to $2 billion, lower by 32.1% from $2.9 billion year-on-year.

“This was due largely to the 53% decline in net investments in debt instruments to $1.1 billion from $2.2 billion,” the BSP said.

“In addition, reinvestment of earnings contracted by 21.7% to $269 million during the review period from $343 million a year ago,” it added.

The central bank noted that the reduction in FDI for the period January to April was tempered by the 95.2% increase in net investments in equity capital to $661 million from $338 million.

Equity capital placements emanated largely from the Netherlands, Japan, and Singapore during the period, it said.

These were invested mainly to the manufacturing, real estate, and administrative and support service industries, it added.—AOL, GMA News