Foreign direct investments (FDI) registered US$677 million net inflows in December 2018. This level, however, is 4.8 percent lower than the US$712 million net inflows recorded in the same month of 2017. The decline in FDI was due largely to the 57.6 percent drop in net investments of equity capital to US$132 million from US$312 million a year ago.1,2 Equity capital placements during the month originated mainly from Thailand, the United States, Japan, Singapore, and the Netherlands. By economic activity, said placements were invested largely in 1) financial and insurance, 2) electricity, gas, steam and air-conditioning supply, 3) wholesale and retail trade, 4) manufacturing, and 5) real estate industries. Reinvestment of earnings also declined to US$61 million from US$65 million. Meanwhile, net investments in debt instruments (consisting mainly of intercompany borrowings/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines) increased by 44.7 percent to US$484 million in December 2018 from US$335 million in December 2017.

On an annual basis, FDI net inflows reached US$9.8 billion in 2018, down by 4.4 percent from the US$10.3 billion net inflows in 2017. Net investments of equity capital were lower at US$2.3 billion compared to US$3.4 billion recorded in 2017. The bulk of equity capital placements in 2018 were sourced mainly from Singapore, the United States, Hong Kong, Japan, and China. These were channeled primarily to 1) manufacturing, 2) financial and insurance,3) real estate, 4) electricity, gas, steam and air-conditioning supply, and 5) arts, entertainment and recreation industries. Reinvestment of earnings also declined slightly by 0.4 percent to US$859 million in 2018 from US$863 million in 2017. By contrast, net availment of debt instruments rose by 11.3 percent to US$6.7 billion in 2018 from US$6 billion in 2017.

Source: Bangko Sentral ng Pilipinas (BSP)