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Net inflows of foreign direct investments (FDIs) rose for the fifth straight month in October, posting a 98.9-percent growth year-on-year to $855 million from $430 million, latest data from the Bangko Sentral ng Pilipinas show in a report by Manila Standard..
The figure brought the FDI net inflows in the first 10 months of 2021 to $8.1 billion, higher by 48.1 percent than the $5.5-billion net inflows a year ago and surpassed the $8-billion full-year net FDI target for 2021.
“Cumulative FDI net inflows rose on the back of the 78.6-percent increase in non-residents’ net investments in debt instruments to $5.9 billion from $3.3 billion in the same period in 2020,” the BSP said in a statement.
Reinvestment of earnings reached $942 million, an 11.9-percent increase from the $842 million posted in January to October 2020. Meanwhile, non-residents’ net investments in equity capital (other than reinvestment of earnings) remained broadly stable at $1.3 billion.
Cumulative equity capital placements dipped slightly by 3.6 percent to $1.6 billion from $1.7 billion, while withdrawals grew 2.3 percent to $351 million from $343 million.
Equity capital placements in the period came mostly from Singapore, Japan, the United States, and the Netherlands. These were channeled primarily to manufacturing; electricity, gas, steam, and air-conditioning; financial and insurance; and real estate industries.
The recorded increase in FDI net inflows in October was mainly on account of the 78.5-percent growth in non-residents’ net investments in debt instruments to $637 million from $357 million in October 2020.
Non-residents’ net investments in equity capital (other than reinvestment of earnings) also increased to $141 million from $1 million in the comparable month in 2020. The notable expansion was due to the improvement in equity capital placements by 80 percent to $154 million from $86 million and the decline in equity capital withdrawals by 84.1 percent to $13 million from $85 million.
Equity capital placements were sourced mainly from Japan, Singapore and the United States. These were channeled mainly to manufacturing; electricity, gas, steam, and air-conditioning; and real estate industries. Reinvestment of earnings for the month amounted to $77 million, up by 7.1 percent from $72 million.
The BSP, in Decemger, raised the 2021 target for FDI net inflows to $8 billion from $7 billion previously, taking into account the improving global economic outlook despite the prolonged impact of the COVID-19 pandemic.
FDI net inflows hit $6.6 billion in 2020, despite the devastating impact of the global health crisis to the global economy.