Foreign direct investments (FDI) that flowed into the Philippines reached $8.93 billion in 2024 which is a tiny improvement over the previous year, according to a BusinessWorld news report. The result was below the target for 2024 set by the Bangko Sentral ng Pilipinas (BSP).
To put things in perspective, posted below is an excerpt from the BusinessWorld report. Some parts in boldface…
NET INFLOWS of foreign direct investments (FDI) into the Philippines inched up by just 0.1% in 2024 but plunged in December to its lowest monthly tally in 11 years, amid uncertainty in global trade, data from the central bank showed.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed FDI net inflows edged higher to $8.93 billion in 2024 from $8.925 billion in 2023, ending two straight years of declining inflows.
The 2024 FDI tally was also the highest in two years but below the BSP’s forecast of $9 billion.
Investments in equity and investment fund shares rose by 13.1% to $2.7 billion in 2024 from $2.39 billion in 2023.
Net foreign investments in equity capital climbed by 42.4% to $1.54 billion last year from $1.08 billion in 2023. Placements increased by 4.3% to $2.17 billion, while withdrawals fell by 37.1% to $628 million.
BSP data showed these placements mainly came from Japan (38%), the United Kingdom (35%), the United States (10%), and Singapore (8%).
Investments were mostly channeled into manufacturing (68%), followed by real estate (12%), and information and communication (5%) industries.
Meanwhile, net investments in debt instruments stood at $6.23 billion, down by 4.7% from $6.53 billion in 2023. Reinvestment of earnings likewise declined by 11.2% to $1.17 billion from $1.31 billion.
DECEMBER SLUMP – In December alone, FDI net inflows plunged by 85.2% to $110 million from $743 million in the same month in 2023. Month on month, inflows likewise fell by 88% from $922 million.
December saw the lowest FDI net inflow in 11 years or since the $102.16 million recorded in December 2013.
“While nonresidents’ net equity capital investments rose, FDI declined due to increased debt repayments by resident corporations to their nonresident direct investors,” the BSP said.
The higher debt repayments brought net investments in debt instruments to an outflow of $19 million in December, a reversal of the $618-million inflow in the same month in 2023.
Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the Philippines can do more to attract more foreign direct investments this year? Do you think the FDI of 2024 will result in new businesses and new jobs all over the Philippines this year?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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