Foreign direct investment (FDI) net inflows rose for the third consecutive month this year, according to the Bangko Sentral ng Pilipinas (BSP).
Data from the BSP showed that net FDI inflows reached $686 million in March 2024, a 23.1 percent increase year-on-year.
FDIs refer to investment by a non-resident direct investor in a local enterprise, whose equity capital in the latter is at least 10 percent and investment made by a non-resident subsidiary/associate in its resident direct investor. FDIs can be in the form of equity capital, reinvestment of earnings and borrowings.
The BSP said the higher figure in March was led by nonresidents’ net investments in debt instruments, which grew 19.0 percent year-on-year to $465 million from $391 million in March 2023. Net investments in debt instruments consist mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines.
Nonresidents’ net investments in equity capital excluding reinvested earnings also rose 67.1 percent to $157 million from $94 million.
Reinvested earnings, however, declined 11.3 percent to $64 million in March 2024 from $72 million in March 2023.
Equity capital placements in March came mainly from Japan, Singapore and the United States. These investments were concentrated in manufacturing, financial and insurance and real estate.
This brought FDI net inflows to $3.0 billion in the first quarter of 2024, a 42.1-percent increase from $2.1 billion recorded a year ago.
“FDI increased during the quarter on the back of the country’s strong growth prospects and moderating inflation,” the BSP said.
The Department of Trade and Industry (DTI) said this shows the growing confidence of global investors in the Philippines as a prime investment destination.
“The positive trends follow our investment promotion efforts in these countries, among others. These engagements have been pivotal in bolstering investor confidence and forging stronger economic partnerships,” said DTI Secretary Alfredo Pascual.
Pascual underscored the commitment of the DTI to creating an environment that fosters long-term investments and sustainable growth in infrastructure development, economic stability and investor-friendly reforms.
“Our goal is to ensure that investment inflows translate into meaningful economic opportunities and improved quality of life for all Filipinos,” Pascual said.
