Daily TribuneThe decline in foreign direct investment net inflows reflected the decrease in non-residents’ net investments in debt instruments, which more than offset the growth in net equity capital placements
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For the first three quarters of 2022, FDI net inflows decreased by 10 percent to $6.7 billion from $7.5 billion in the same period last year. FDI remained subdued amid lingering concerns on global economic slowdown, higher inflation, and the depreciation of the peso. | Photograph courtesy of BSP
An economist said Monday that inflation and global interest rates might have weighed down the country's direct foreign investments inflow by 7.9 percent in September.
Latest data from the Bangko Sentral ng Pilipinas showed that the country's FDI net inflows for September stood at $626 million, down from $774 million in August and $680 million in the same month last year.
Year-to-date, FDI net inflows for September were recorded at $6.713 billion, reflecting a 10.0 percent drop from $7.462 billion in the comparable period of 2021.
In a statement sent to Daily Tribune, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the increased risk of recession in the United States could slow down foreign direct investments, remittances, and other economic activities worldwide.
Meanwhile, the BSP said the decline in FDI net inflows reflected the "decrease in non-residents' net investments in debt instruments," which more than offsets the growth in their net equity capital placements.
"More and improved diplomatic relations recently would help improve the FDI data in the coming months, especially if environmental social and governance standards are increasingly adhered to in the country, as encouraged by regulators worldwide as a basis for investment decisions," Ricafort said.
Net equity, debt instruments data
Net equity placements for the month of September 2022 increased to $187 million from $31 million in August to $33 million in September 2021. Most placements came from Singapore, Japan and the United States.
These were primarily focused on the finance and insurance sectors (52 percent), manufacturing (22 percent), and real estate (11 percent).
Net debt instruments decreased from $577 million in August and $555 million in the same month last year to $351 million this month.
"FDI remained subdued amid lingering concerns on global economic slowdown, higher inflation and the depreciation of the peso," the BSP said.
