Foreign direct investment (FDI) stood at a lower net inflow for the entire 2022 amid high inflation and the global economic slowdown, data released by the Bangko Sentral ng Pilipinas (BSP) showed Friday.
FDI net inflows from January to December last year reached $9.2 billion, down 23.2% from $12 billion net inflows seen in 2021.
“Notwithstanding the country’s sustained growth momentum, FDI net inflows decreased in 2022 due to the extended global slowdown and high inflation, which adversely affected investor decisions,” the BSP said.
FDI refers to investment by a foreign or non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10% or an investment made by a foreign subsidiary/associate in its resident direct investor.
FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.
The BSP said FDI covers actual investment inflows and is different from the approved foreign investments data that are published by the Philippine Statistics Authority (PSA) sourced from investment promotion agencies, representing commitments or pledges which may not necessarily be realized fully, in a given period.
In December 2022 alone, FDI net inflows amounted to $634 million, down 76.2% from $2.7 billion net inflows in December 2021.
“The decline in FDI during the reference month was due largely to base effect, particularly given the significantly larger net placements of equity capital in December 2021,” the BSP said.
Bulk of the equity capital placements as sourced from Singapore, Germany, and Japan were channeled mostly to the manufacturing and real estate industries during the reference month, the central bank said. — DVM, GMA Integrated News