THE country’s total foreign direct investment (FDI) inflows recorded an eight-month high in October, according to the Bangko Sentral ng Pilipinas (BSP).
Based on the data, FDI net inflows grew 50.2 percent to $1.02 billion in October 2024 from $681 million in October 2023.
This is the highest since the $1.367 billion posted in February 2024. In terms of growth, this was the fastest since January 2024 when FDI grew 79.1 percent.
“FDI includes investment by a nonresident direct investor in a resident enterprise, where the equity capital in the latter is at least 10 percent,” BSP said.
“It also includes investment made by a nonresident subsidiary or associate in its resident direct investor. FDI can be in the form of equity capital, reinvestment of earnings, and borrowings,” it added.
BSP data showed that with this FDI growth in October 2024, the January-October 2024 net inflows reached $7.7 billion. This represented a growth of 8.2 percent from the $7.1 billion net inflows in January-October 2023.
Nomura analysts Euben Paracuelles and Nabila Amani said public investment spending will remain a major growth engine for the Philippines and could help crowd in more investments, including FDIs.
They noted that there is a government push for more progress on infrastructure projects with an added impetus from the mid-term elections on May 12, 2025.
“Sustained infrastructure implementation should, in our view, start to crowd in private investment spending when borrowing costs are declining and BSP is easing monetary policy,” they said. “However, strong external headwinds will likely provide some offset due to Trump’s policy proposals.”
The data showed the increase in net FDI inflows was due to the 60.7-percent growth in nonresidents’ net investments in debt instruments to $839 million, from $522 million in the same period in 2023.
The data also showed that nonresidents’ net investments in equity capital (other than reinvestment of earnings) rose by 34.1 percent to $100 million from $74 million.
However, a contraction in nonresidents’ reinvestment of earnings moderated the growth of the country’s FDI inflows.
The data showed a decline of 0.9 percent in nonresident’s reinvestment of earnings to $83 million from $84 million in October 2023.
“Equity capital placements in October 2024 came largely from Japan, the United States, and Singapore. These investments were directed primarily to the manufacturing, real estate, and construction industries,” the BSP said.
Different from other agencies
The BSP noted that its FDI statistics are different from the investment data of other government sources. BSP FDI covers actual investment inflows.
In contrast, the approved foreign investments data published by the Philippine Statistics Authority (PSA) are sourced from Investment Promotion Agencies (IPAs).
These represent investment commitments, BSP said, which may not necessarily be fully realized in a given period.
The PSA data are also not based on the 10-percent foreign ownership criterion under BPM6 and the BSP’s FDI data are presented in net terms (i.e., equity capital placements less withdrawals).
The PSA’s foreign investment data, however, does not account for equity withdrawals.
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