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FDIs sustain strong growth in October

The Bangko Sentral ng Pilipinas (BSP) on Monday reported a 98.9-percent rise in the country’s foreign direct investments (FDIs) in October, bringing the country’s total FDI inflows above the P8-million mark.


FDIs to the country grew for the fifth consecutive month in October last year to hit $855 million from the $430 million in the same month in 2020. This marked a 98.9-percent rise year-on-year.


FDIs are investments made by foreign players to the Philippines in the hopes of long-term return. Since these are in the country for a longer term compared to their short-term counterpart, the foreign portfolio investments (FPI), FDIs usually create jobs for Filipinos and has a multiplier effect on the economy.


The BSP said the recorded increase in FDI net inflows in October 2021 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 likewise increased to $141 million from $1 million in the comparable month in 2020.


The notable expansion was traced 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 during the month were sourced mainly from Japan, Singapore, and the United States. These were channeled mainly to the 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 strong FDI performance in October brought the 10-month FDI of the country to $8.14 billion, up 48.1 percent from the January to October period in 2020.


Rizal Commercial Banking Corporation (RCBC) economist Michael Ricafort said FDI data could still improve for November and December of 2021.


“For the coming months, FDI could still continue to go up amid better global economic prospects as some developed countries that are the major sources of FDI move towards herd immunity,” Ricafort said.


Source: BusinessMirror

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