FDIs post double-digit drop of 11.8% in April

CEBU, Philippines — Foreign direct investments posted a double-digit drop of 11.8% in April this year compared to the same month last year, a report released by the Bangko Sentral ng Pilipinas (BSP) revealed yesterday.

April 2019 FDI recorded net inflows of $961 million, which is lower than the $1.1 billion net inflows posted in the same period last year.

Meanwhile, net equity capital declined by 85.5% to $39 million from $272 million in April 2018.

Equity capital placements were largely from Thailand, United States, Singapore, Hong Kong, and Japan. The investments were channeled mainly for financial and insurance, real estate, manufacturing, electricity, gas, steam and air-conditioning supply and construction industries.

On the other hand, investments in debt instruments, which consist mainly of loans granted by parent companies abroad to their local partners, went up by 12.6% to $830 million from $737 million posted in the same period last year.

Reinvestment of earnings reached $92 million, which is 14% higher than the $80 million recorded in April 2018.

On a year-to-date basis, FDI yielded $2.9 billion net inflows in January-April 2019, which is 14% lower than the $3.4 billion net inflows recorded a year ago.

This developed on account of the decline in net equity capital investments as placements dropped by 44.5% to $712 million from $1.3 billion, coupled with a 204.9% increase in withdrawals to $377 million from $124 million during the period.

Equity capital placements during the first four months of the year were mostly from Japan, the United States, China, Singapore, and South Korea.

Placements were invested mainly on financial and insurance, real estate, manufacturing, transportation and storage, and administrative and support service industries.

Meanwhile, net investments in debt instruments went up by 16.3% to reach $2.2 billion from $1.9 billion posted a year ago. Reinvestment of earnings amounted to $326 million, higher by 12.1% than the $291 million recorded in the same period last year.