Net FDI up 50.2%, hits 8-month high

$1B in October improves from year-ago $681M

NET foreign direct investments (FDIs) hit an eight-month high of $1.0 billion in October last year, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, the highest since the $1.37 billion posted in February and up 50.2 percent from the year-earlier $681 million.

«The increase in net FDI inflows was due to the 60.7 percent growth in nonresidents' net investments in debt instruments to $839 million from $522 million,» the central bank said in a statement.

Nonresidents' net investments in equity capital also rose to $100 million, up 34.1 percent from the year-earlier $74 million, but the overall FDI growth was slightly offset by a 0.9-percent dip — to $83 million from $84 million — in reinvestments of earnings.

The equity capital placements mostly came from Japan (63 percent), the United States (14 percent) and Singapore (5.0 percent), and were mostly channeled to the manufacturing (59 percent), real estate (16 percent) and construction (6.0 percent) industries.

Year to date, net FDI was 8.2 percent higher at $7.7 billion compared to the $7.1 billion seen in January-October 2023.

Equity capital placements ballooned to $1.46 billion in the 10-month period from $998 million a year ago, while reinvestments of earnings eased to $1.03 billion from $1.07 billion. Net investments in debt instruments rose to $5.19 billion from $5.02 billion.

January-October equity capital placements originated mostly from the United Kingdom (40 percent), Japan (39 percent), the United States (9.0 percent) and Singapore (5.0 percent).

The bulk, or 73 percent, went to manufacturing, followed by real estate (12 percent), and wholesale and retail trade (4.0 percent).

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the FDI surge could be attributed to foreign investors becoming more decisive in establishing businesses in the Philippines following approval of the Corporate Recovery and Tax Incentives for Enterprises (Create) and the Maximize Opportunities for Reinvigorating the Economy (More) laws.

"[T]here would be more FDI into the country for the coming months due to Create More and also due to the expected