FDI Posts US$623 Million Net Inflows in November 2019; January-November Level Reach US$6.4 Billion

Foreign direct investments (FDI) posted US$623 million net inflows in November 2019, representing a 14.6 percent increase from the US$543 million net inflows in the comparable period in 2018.1,2 This was due mainly to the increases posted in all FDI components. In particular, net investments in debt instruments (consisting mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines) recorded net inflows of US$380 million from US$341 million in November 2018. Similarly, net investments in equity capital grew by 12.9 percent as equity capital placements (US$174 million) more than offset equity capital withdrawals (US$19 million). Reinvestment of earnings also increased by 35.1 percent to US$88 million during the period.

The bulk of equity capital placements were sourced mainly from the United States, Thailand, Japan, and South Korea. These investments were channeled mostly to the financial and insurance, and real estate industries.

From January�November 2019, FDI net inflows amounted to US$6.4 billion,a decline of 29.9 percent from the US$9.2 billion recorded in the comparable period in 2018. Concerns over the global economic outlook continued to curb FDI as investor confidence remained muted. Non-residents' net investments in debt instruments declined by 25.2 percent to US$4.7 billion. Likewise, net equity capital investments contracted by 60.4 percent to US$845 million. Equity capital placements during the 11�month period emanated largely from Japan, the United States, Singapore, China, and South Korea. These capital infusions were invested primarily in the 1) financial and insurance, 2) real estate, and 3) manufacturing industries. Meanwhile, reinvestment of earnings reached US$913 million, up by 14.4 percent from the US$798 million registered in the first eleven months of 2018.

Source: Bangko Sentral ng Pilipinas (BSP)