Foreign direct investments (FDI) recorded net inflows of $531 million in November 2018, albeit 45.9% lower than the $982 million net inflows posted in November 2017, according to data from the Bangko Sentral ng Pilipinas (BSP).
The decline was due largely to the drop in net investments in debt instruments (consisting mainly of intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines), which amounted to $333 million from $724 million in the same month in 2017. Net investments of equity capital registered $137 million, which was 31.9% lower than the $202 million net equity capital inflows in November 2017.
Equity capital placements during the month were sourced largely from Taiwan, the United States, Thailand, Luxembourg, and the Netherlands. These investments were channeled mostly to: (1) financial and insurance; (2) electricity, gas, steam and air-conditioning supply; (3) manufacturing; and (4) real estate activities. Reinvestment of earnings rose by 9.5% to $61 million in November 2018.
As a result of these developments, FDI registered $9.1 billion net inflows in January–November 2018, 3.2% lower than the $9.4 billion recorded in the same period in 2017. The lower net inflows was attributed mainly to the 28.3 percent decline in net investments of equity capital, which reached $2.1 billion in the first eleven months of 2018. Equity capital placements during the period – mostly from Singapore, Hong Kong, the United States, Japan, and China – were invested mainly in: (1) manufacturing; (2) financial and insurance; (3) real estate; (4) arts, entertainment and recreation; and, (5) electricity, gas, steam and air-conditioning supply activities.
Meanwhile, net investments in debt instruments grew by 9.3% to reach $6.2 billion from $5.7 billion in the same period last year. Reinvestment of earnings also increased by 2.8% to $738 million.