Foreign direct investment (FDI) net inflows continued its growth momentum in September 2021, recording a 30.4 percent expansion year-on-year to reach US$660 million from the US$506 million net inflows in September 2020 (Table 1).1,2 This brought the cumulative FDI net inflows for the first three quarters of 2021 to US$7.3 billion, higher by 43.8 percent than the US$5.1 billion net inflows in the same period in 2020. This was mainly on account of the 78.6 percent increase in non-residents’ net investments in debt instruments to US$5.3 billion from US$3 billion last year.3 Further, reinvestment of earnings reached US$865 million, up by 12.3 percent from the US$770 million a year ago. Meanwhile, non-residents’ net investments in equity capital (other than reinvestment of earnings) dropped by 15.7 percent to US$1.1 billion from US$1.3 billion in January-September 2020.
Net investments in equity capital declined as placements contracted by 8.1 percent to US$1.5 billion (from US$1.6 billion) and withdrawals rose by 30.7 percent to US$337 million (from US$258 million). Bulk of the equity capital placements originated from Singapore, Japan, the United States, and the Netherlands. These were invested mostly in the 1) manufacturing; 2) financial and insurance; 3) electricity, gas, steam, and air-conditioning; and 4) real estate industries.
FDI net inflows in September 2021 rose on the back of the 60.2 percent increase in non-residents’ net investments in debt instruments to US$538 million from US$336 million in the same month last year. Likewise, reinvestment of earnings grew by 25.2 percent to US$89 million from US$71 million.
However, non-residents’ net investments in equity capital (other than reinvestment of earnings) declined by 67.4 percent to US$32 million from US$99 million in September 2020. This was due to the decrease in equity capital placements (by 22.3 percent to US$88 million from US$114 million), coupled with the expansion in equity capital withdrawals (by 269.8 percent to US$56 million from US$15 million).
Equity capital placements during the month came largely from Japan, the United States, Hong Kong, Indonesia, and Singapore. These were channeled mainly to the 1) manufacturing; 2) real estate; 3) professional, scientific and technical; and 4) construction industries.
Source: Bangko Sentral ng Pilipinas (BSP)