By Monsi A. Serrano
Foreign direct investment (FDI) surged in June this year, posting a 60.4-percent increase year-on-year to $833 million from the $519-million net inflows in the same month last year, the Bangko Sentral ng Pilipinas (BSP) reported.
If compared with the FDI net inflows in the first half of 2020 at $3.1 billion, this year’s January-to-June figure reflects a 40.7 percent hike at $4.3 billion.
The BSP credited the bigger cumulative FDI net inflows to the 86.5-percent growth in non-residents’ net investments in debt instruments which rose from the previous $1.5 billion to $2.8 billion.
The BSP only noted a decline for net investments in equity capital by 8.9 percent, with 2020 doing better at $1.1 billion as against this year’s $971 million.
It said FDI net inflows in June 2021 increased mainly on account of infusion by foreign direct investors to their subsidiaries/affiliates in the country in the form of net investments in debt instruments, which rose year-on-year by 151.8 percent to $630 million.
At the same time, reinvestment of earnings grew by 23.4 percent to $110 million from $89 million.
Meanwhile, non-residents’ net investments in equity capital declined by 48.4 percent to $93 million in June 2021 from $180 million in the same month last year.
The BSP said this was due to the downturn in equity capital placements (by 38.2 percent to $119 million from $192 million) along with the increase in equity capital withdrawals (by 112 percent to $26 million from $12 million).
Also, concerns over the spread of more transmissible Delta variant of COVID-19 might have prompted investors to remain on the sidelines, it said.
The BSP noted that equity capital placements during the month originated mostly from Japan, the United States, and Singapore. These were invested largely in the 1) manufacturing; 2) real estate; and 3) financial and insurance industries.