Foreign direct investment net inflows continue growth in Feb

FOREIGN direct investment (FDIs) net inflows went up by 29.3 percent in February this year.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that FDI net inflows during the month amounted to USD1.4 billion, up from the USD1.1 billion postedin February

last year.

“This development was due to the 927.3 percent expansion in nonresidents’ net investments in equity capital to USD764 million from USD74 million in February 2023,” BSP said.

However, the BSP added that the growth in FDI inflows was tempered by the 41.5 percent contraction in nonresidents’ net investments in debt instruments to USD533 million in February 2024 from USD912 in February 2023.

Reinvestment of earnings also slightly declined to USD66 million from USD69 million.

FDIs include investment by a nonresident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and investment made by a nonresident subsidiary or associate in its resident direct investor.

The FDI could be in the form of equity capital, reinvestment of earnings, and borrowings.

“Bulk of the equity capital placements during the reference month came from the Netherlands, with investments directed mostly to the financial and insurance industry,” the central bank said.

For the first two months of the year, FDI net inflows amounted to USD2.3 billion, up by 48.2 percent from the USD1.5 billion recorded in the same period last year.

“The growth in FDI reflects sustained investor confidence in the country’s macroeconomic fundamentals and resilience amid persistent inflationary pressures and global economic uncertainties,” the BSP said.

The Netherlands and Japan were the top sources of FDIs during the period. /