The Philippines recorded its highest foreign direct investment (FDI) net inflows in 2021 amounting to USD10.52 billion, increasing by 54.2 percent from USD6.82 billion the previous year, the Bangko Sentral ng Pilipinas (BSP) reported.
BSP Governor Benjamin Diokno said the amount last year topped the previous record level of $10.3 Billion recorded in 2017. It was also higher than the $8 billion target for 2021 that was breached as early as October of last year.
FDIs continued to gain momentum last year despite two major lockdowns both in the first and second semesters of the year due to a surge in coronavirus disease 2019 (Covid-19) cases.
The central bank said FDI net inflows last year grew on the back of the 80.4-percent increase in net investments in debt instruments amounting to USD7.5 billion from USD2.4 billion in 2020.
Reinvestment of earnings rose 34.7 percent to USD1.3 billion last year from 2020’s value of USD944 million. Net investments in equity capital other than reinvestment of earnings slightly grew by 0.7 percent to USD1.72 billion in 2021 from USD1.71 billion the previous year.
Top sources of equity capital placements last year were Singapore, Japan, the United States, and the Netherlands, with bulk of investments infused in sectors of manufacturing; electricity, gas, steam, and air-conditioning; financial and insurance; and real estate.
On the other hand, withdrawals increased by 1.8 percent to $399 million from $392 million. For December alone, Diokno said the net FDI inflow soared by 59 percent to $1.07 billion from $671 million the same month last 2021.
This was attributed mainly to 60 percent growth in non-residents’ net investments in debt instruments to $634 million from $396 million, while non-residents’ net investments in equity capital surged by 59.5 percent to $366 million from $211 million. Equity capital placements last year emerged largely from Singapore, Japan and the Netherlands.
For December 2021 alone, FDI net inflows rose 59 percent to USD1.1 billion from USD671 million in the same month in 2020. For this year, the BSP is projecting a net FDI inflow of $8.5 billion instead of $7.5 billion as the country continues to recover from the impact of the pandemic.
With additional reports: Kris Crismundo, pna.gov.ph–Lawrence Agcaoili, The Philippine Star
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