Net inflows of foreign direct investments rose 3.1 percent in the first half to $4.6 billion from $4.5 billion a year ago despite the 51.5-percent drop in June, data from the Bangko Sentral ng Pilipinas show.
The BSP said net FDI inflows in June amounted to $471 million, down from $971 million in the same month last year.
“In June 2022, FDI net inflows declined following the drop in non-residents’ net investments in debt instruments of their local affiliates due to higher repayments during the month. This muted the increase in their net investments in equity capital and reinvestment of earnings,” the BSP said in a statement.
Equity capital placements in June came mostly from Japan, the United States, Singapore and Switzerland. These investments went mainly to the manufacturing, real estate and information and communication industries.
Net inflows of FDIs 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 $6.8 billion 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. They 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 said the FDI statistics are distinct from the investment data of other government sources. FDIs cover actual investment inflows, while approved foreign investments data from investment promotion agencies represent investment commitments, which may not necessarily be realized fully, in a given period. Those data are not based on the 10-percent ownership criterion under BPM6.
The BSP expects FDI net inflows to reach $11 billion this year.