Philippine foreign investment net inflows fall to 10-month low in March

Foreign direct investments (FDI) into the Philippines declined to a 10-month low in March due to investor concerns on the global economic recovery outlook, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.

Data released by the central bank showed that FDI net inflows stood at $727 million in March, 9.8% lower than the $806 million recorded in the same month last year and the $893 million recorded in February.

The latest FDI net inflow is the lowest in 10 months since the Philippines registered $452 million in April 2021.

FDI is a cross-border investment of an overseas resident having control or a significant degree of influence on the management of an enterprise that resides in the Philippines.

“While the country’s macroeconomic fundamentals remain sound, external risks, such as the impact of Russia’s invasion of Ukraine on commodities and financial market condition, the start of policy tightening in several major central banks and the resurgence of COVID-19 cases in many Asian economies, may have contributed to investors’ concern about the outlook on the global economic recovery,” the BSP said in an accompanying statement.

Inflows for the month stemmed mostly from non-residents’ net investments in debt instruments of local affiliates, which grew by 45.1% to $543 million from $374 million last year.

Non-residents’ net investments in equity capital declined by 69.6% to $106 million, bringing equity capital placements down 68.7% to $118 million. Equity capital withdrawals fell by 58.2% to $12 million.

Equity capital placements in March came mostly from Japan, the United States, and Singapore which were then channeled into manufacturing, real estate, and financial and insurance industries.

First-quarter net FDI inflows were recorded at $2.439 billion, reflecting a 2.0% increase from $2.391 billion in the first three months of 2021.  —KBK, GMA News