Net inflows of foreign direct investments (FDI) sank to $6.54 billion last year, their smallest in five years, but breached the full-2020 estimate of the Bangko Sentral ng Pilipinas (BSP).
Central bank data showed that the amount — the lowest since 2015’s $5.63 billion — was a 24.6-percent decrease from the adjusted $8.67 billion in 2019. Still, it surpassed the BSP’s $6-billion forecast for 2020.
“The disruptive impact of the [coronavirus] pandemic on global supply chains and the weak business outlook adversely affected investor decisions in 2020,” the Bangko Sentral said in a statement on Wednesday.
component, net investments in equity capital shrank by 35.7 percent to $1.47 billion from $2.29 billion year-on-year. Equity capital placements contracted by 37.8 percent to $1.86 billion from $3 billion while withdrawals declined by 44.5 percent to $392 million from $706 million.
Last year’s Infusions came mainly from Japan, The Netherlands, the United States and Singapore. These were placed mainly in the manufacturing, real estate, and financial and insurance industries.
Net investments in debt instruments fell by 22 percent to $4.08 billion from $5.24 billion. Reinvestment of earnings dived by 13.6 percent to $978 million from $1.13 billion.
For December alone, FDI net inflows decreased by 62.6 percent to $509 million from $1.36 billion a year earlier. This figure was worse than November’s $546 million and the weakest since October’s $430 million.
The central bank said the year-on-year fall was “due mainly to base effects given significantly large inflows from net investments in equity capital and debt instruments in December 2019.”
Net investments in equity capital sank by 89.8 percent year-on-year to $78 million from $766 million. This resulted from equity capital placements dropping by 87.8 percent to $97 million from $800 million and equity capital withdrawals easing by 42.9 percent to $20 million from $34 million.
The December investments came largely from Japan, the US, The Netherlands and
Singapore. These were channeled mainly into the manufacturing, real estate, and financial and insurance sectors.
Net investments in debt instruments also dipped by 2.6 percent to $71 million from $73 million in December 2019. Reinvestment of earnings declined by 31.1 percent to $360 million from $523 million a year earlier.
The BSP projects these job-generating investments to reach $7.5 billion in 2021.