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Business

FDI soar by 54%, hit record $10.5 billion

Lawrence Agcaoili - The Philippine Star
FDI soar by 54%, hit record $10.5 billion
BSP Governor Benjamin Diokno said the amount last year topped the previous record level of $10.3 billion recorded in 2017. It was also higher than the $8 billion target for 2021 that was breached as early as October.
STAR / File

MANILA, Philippines — The net inflow of foreign direct investments (FDI) soared by 54.2 percent to hit an all-time high of $10.52 billion last year, as global investors returned following the country’s exit from the pandemic-induced recession, the Bangko Sentral ng Pilipinas said.

BSP Governor Benjamin Diokno said the amount last year topped the previous record level of $10.3 billion recorded in 2017. It was also higher than the $8 billion target for 2021 that was breached as early as October.

“The growth in FDI reflected continued positive foreign investor sentiment on the country amid expectations of a rebound in domestic economic activity and declining COVID-19 reported cases, as well as the strengthening of the global economy,” Diokno said.

The BSP chief said the cumulative net inflows rose on the back of the 80.4 percent jump in non-residents’ net investments in debt instruments to $7.53 billion from $4.17 billion as multinational companies continued to inject more money into their affiliates in the Philippines.

Reinvestment of earnings grew by 34.7 percent to $1.27 billion from $944 million.

Likewise, Diokno said non-residents’ net investments in equity capital inched up by 0.7 percent to $1.72 billion from $1.71 billion.

Data showed equity capital placements from Singapore, Japan, the US and the Netherlands remained steady at $2.12 billion last year from $2.1 billion in 2020. The infusions were channeled to manufacturing; electricity, gas, steam and air-conditioning; financial and insurance, as well as real estate industries.

On the other hand, withdrawals inched up by 1.8 percent to $399 million from $392 million.

For December alone, Diokno said the net FDI inflow jumped by 59 percent to $1.07 billion from $671 million in the same month last year.

This was attributed mainly to the 60 percent growth in non-residents’ net investments in debt instruments to $634 million from $396 million, while non-residents’ net investments in equity capital surged by 59.5 percent to $336 million from $211 million.

Equity capital placements in December emanated largely from Singapore, Japan and the Netherlands.

Meanwhile, reinvestment of earnings soared by 50.3 percent to $96 million from $64 million.

For this year, the BSP is projecting a net FDI inflow of $8.5 billion instead of $7.5 billion as the country continues to recover from the impact of the global health crisis.

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