FDI net inflows hit five-month low in March

Foreign direct investments (FDI) into the Philippines fell to a five-month low in March after posting a 15-month high in February, data released by the Bangko Sentral ng Pilipinas (BSP) on Monday revealed.

The central bank said FDI net inflows stood at $686 million in March, down from $1.366 billion in February, but higher than the $557 million the same month in 2023. The latest figure is the lowest in five months since October 2023’s $670 million.

This comes as net equity other than reinvestment of earnings fell to $157 million from $764 million in February, with gross capital placements sourced primarily from Japan with 64%, Singapore with 16%, and the United States with 10%.

Gross placements were invested mostly in the manufacturing industry which accounted for 66%, financial and insurance with 14%, and real estate with 11%, while other industries made up the remaining 9%.

Reinvestment of earnings saw a slight drop to $64 million from $66 billion in February, while net debt instruments fell to $465 million from $545 million the past month.

Year-to-date FDI net inflows stood at $2.969 billion, reflecting a 42.1% increase from $2.090 billion in the comparable period of 2023.

“FDI increased during the quarter on the back of the country’s strong growth prospects and moderating inflation,” the BSP said in an accompanying statement.

The Philippine economy expanded by 5.7% in the first quarter, marking an acceleration from the three months prior but a slowdown from the same period in the past year.

Inflation, meanwhile, averaged 3.3% in the first quarter, falling within the government’s target range of 2.0% to 4.0%. The May print was recorded at 3.9%, bringing the year-to-date average to 3.5%.

Net equity investments posted a year-on-year growth of 248.5% to $910 million from $261 million, with placements coming mostly from the Netherlands with 68%, and Japan with 21%.

These were channeled mostly into the financial and insurance industry with 71%, followed by manufacturing with 16%, and real estate with 5%. Other industries accounted for the remaining 8%.

Reinvestment of earnings increased by 1.4% to $229 million, while net debt instruments jumped by 14.2% to $1.830 billion.—AOL, GMA Integrated News