November 11, 2021 | 00:00
MANILA, Philippines — Net foreign direct investment (FDI) inflow jumped 40% to $6.37 billion in the first eight months from $4.56 billion in the same period last year last, multinationals continuing to inject more money into their subsidiaries in the Philippines. amid the gradual recovery of the economy, according to the Bangko Sentral ng Pilipinas.
BSP Governor Benjamin Diokno said cumulative net FDI inflows from January to August increased thanks to strong growth in net investments in debt instruments.
The data showed that the infusion of foreign direct investors into their subsidiaries in the Philippines in the form of net investment in debt securities jumped nearly 72% to $4.51 billion during the period. eight months, compared to a level of 2.63 billion dollars a year ago.
Similarly, earnings reinvestment increased by 11%, from $699 million to $776 million.
However, net non-resident equity investment fell 12% to $1.1 billion from $1.2 billion a year ago.
Equity investments primarily from Singapore, Japan and the United States in the manufacturing, finance and insurance, power, gas, steam and air conditioning sectors, as well as the real estate fell 8.2% to $1.4 billion.
In contrast, equity withdrawals rose 12% to $272 million.
In August alone, net FDI inflows rose nearly 20% to $812m from $677m in the same month last year as investment in debt securities jumped 38% to $636 million.
That was enough to offset the 25% drop in earnings reinvestment to $99 million from $132 million.
Equity investments in August rose 7.3% to $126 million, while withdrawals jumped 51% to $50 million.
The National Capital Region (NCR) and neighboring provinces were placed under enhanced community quarantine in August due to the resurgence of COVID cases with the emergence of the highly transmissible Delta variant.
Due to intermittent lockdowns amid the resurgence of COVID-19 cases that could lead to a slower recovery from the pandemic-induced recession, BSP is now looking at a net FDI inflow of $7 billion instead of $7 billion. .5 billion this year.
With the continued reopening of the economy as well as the acceleration of the vaccination rate, economic leaders are confident that the gross domestic product (GDP) growth target lowered by 4 to 5% for the year could be outmoded.
GDP grew at a stronger-than-expected 7.1% in the third quarter, although slower than the 12% expansion recorded in the second quarter of the year.
The Philippines emerged from recession in the second quarter after contracting 3.9% in the first quarter, extending the recession to five quarters.