Foreign direct investments (FDI) inflow exceeded capital flight in March for a net $686-million gain from $557 million a year ago as investors poured funds over debt instruments.

The Bangko Sentral ng Pilipinas (BSP) said this was a 23.1 percent growth year-on-year and the third consecutive month of expansion.

Thus, FDI net inflows in the first quarter reached $3 billion, higher by 42.1 percent from $2.1 billion recorded in the same quarter of the previous year.

“FDI increased during the quarter on the back of the country’s strong growth prospects and moderating inflation,” BSP said.

From the $686-million FDI in March, investments in debt instruments represented $465 million or a 19 percent growth.

Meanwhile, investments in equity capital excluding reinvestment of earnings reached $157 million or 67.1 percent higher than the $94 million posted in March last year.

Japan remains top FDI source

The top sources of FDI in equity capital were Japan with 64 percent share, Singapore with 16 percent, and the US with 10 percent.

Industries with the most FDI included manufacturing with 66 percent share, financial and insurance with 14 percent, and real estate with 11 percent.

However, reinvestment of earnings declined by 11.3 percent to $64 million.

Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said FDI net inflows will likely grow further as the Philippines build stronger partnerships with other countries.

The Department of Trade and Industry said the FDI surge for the first quarter means that the world has maintained its confidence in the country.

Data from the Bangko Sentral ng Pilipinas said FDI net inflows continued their upward momentum for the third consecutive month in March 2024, registering a 23.1 percent year-on-year growth to reach $686 million versus the $557 million net inflows in March 2023.

The expansion in FDI net inflows was driven mainly by nonresidents’ net investments in debt instruments, which grew by 19.0 percent year-on-year to $465 million from $391 million in March 2023, the BSP said.

On the other hand, nonresidents’ net investments in equity capital (other than reinvestment of earnings) rose by 67.1 percent to $157 million from $94 million.