Net inflows of foreign direct investments climbed 48.3 percent in April to $989 million from $667 million a year ago on the sustained confidence of investors in the country’s macroeconomic fundamentals, latest data from the Bangko Sentral ng Pilipinas show.
The BSP said in a statement Monday the positive development brought the FDI net inflows in the first four months to $3.4 billion, up 12.1 percent from $3.1 billion registered in the same period last year.
“Cumulative FDI net inflows rose due mainly to the increase in non-residents’ net investments in debt instruments. Meanwhile, net equity placements [other than reinvestment of earnings] declined during the period,” the BSP said.
Data showed FDI net inflows increased in April following the positive performance of all components, led by non-residents’ net investments in debt instruments. Equity capital placements also expanded, boosted by inflows from Malaysia, the United States and Japan.
These were channeled primarily to the construction; real estate; professional, scientific and technical; and manufacturing industries.
Net inflows of foreign direct investments reached a record $10.5 billion in 2021, breaching the previous high of $10.3 billion in 2017.
The 2021 level represented a 54.2-percent increase from the $6.8 billion net inflow recorded in 2020. It also surpassed the $8-billion net inflow target set by the BSP.
The BSP statistics on FDIs are compiled based on the balance of payments and international investment position manual, 6th Edition.
FDIs include investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent and investment made by a non-resident subsidiary/associate in its resident direct investor. FDIs can be in the form of equity capital, reinvestment of earnings and borrowings.
The BSP expects FDI net inflows to reach $11 billion this year, supporting the balance of payments amid the rising outflows due to higher prices of key imported commodities. The price of Dubai crude oil is expected to remain elevated at $70 to $90 per barrel from 2024 to 2028 as oil supply is expected to catch up and stabilize over the medium-term.
The Development Budget Coordination Committee expects imports to rise 8 percent annually from 2024 to 2028, faster than the 6-percent expected rise of exports from 2023 to 2028. The DBCC, which is composed of economic managers, see the peso stabilizing at 51 to 55 against the US dollar from 2023 to 2028 due to heightened global uncertainty such as the aggressive monetary policy tightening by the US Federal Reserve, market aversion amid Russia-Ukraine conflict and increased global oil prices.