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Net inflows of foreign direct investment (FDI) hit a two-month high in May thanks to improving figures for equity capital and debt instruments, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.
Central bank data showed that month’s inflows soared 42.4 percent to $ 399 million, the highest since March’s 507 million, from $ 280 million the previous year.
“The positive growth represents a reversal of the last three consecutive months of decline, attributed in large part to the weak global outlook and investor confidence after the pandemic,” explained the BSP in a statement, referring to the crisis of the disease. 2019 coronavirus.
It tracked the “stronger” performance of FDI to the rebound in nonresident net investments in debt instruments (an increase of 40.8 percent to $ 236 million from $ 168 million in the same month of 2019) and equity capital , which accelerated to $ 78 million from $ 1 million a year ago as $ 80 million in inflows exceeded $ 3 million outflows.
The May infusions came largely from Japan, Singapore and the United States, which the Bangko Sentral described as the economies that gradually eased the coronavirus containment measures. The inflows from these countries were mainly channeled to the manufacturing, finance and insurance and real estate industries.
Reinvestment of earnings also decreased 23.7 percent to $ 85 million from $ 111 million.
The central bank said the double-digit rise “reduced the cumulative drop in the level from January to May 2020 to 25.6 percent ($ 2.4 billion) from a 32.1 percent contraction recorded in the first four months of the year “.
The year-to-date decline was largely attributed to the 46.4 percent drop in net investments in debt instruments to $ 1.28 billion from $ 2.4 billion.
Additionally, reinvested earnings fell 22.2 percent to $ 353 million from $ 454 million in the period.
However, the fall from January to May was partially offset by the 117.4 percent increase in net equity placements to $ 738 million from $ 339 million.
Gross placements increased 4.8 percent to $ 842 million from $ 803 million, while withdrawals plummeted 77.7 percent to $ 103 million from $ 464 million.
The capital injections in the five months ending in May came mainly from the Netherlands, Japan and Singapore. These were invested in the manufacturing, real estate, and administrative and support services sectors.
