BSP Says That PH Net Inflows of FDIs Decreased in August

According to data released by the Bangko Sentral ng Pilipinas (BSP) reports that the net inflows of Foreign Direct Investments (FDIs) in the Philippines decreased last August with the increased interest rates and threats of a global economic slowdown.

Figures of the Bangko Sentral ng Pilipinas (BSP) exhibit that FDI net inflows declined by 19.2% equivalent to $707 million compared to the $987 of the same period last year.

In July, the net inflows of FDIs month-on-month were pegged at 73.3% higher than July’s figures of $460 million.

Even with the decline, August experienced the largest monthly FDI inflow since April’s figures of $989 million.

“The slowdown in FDI may be attributed to concerns over weakening global growth prospects, particularly with the moderating demand and policy tightening in major economies,”  mentioned BSP in a statement.

The global economy is predicted to have a gloomy outlook due to the pandemic, Russia – Ukraine war, the slowdown in China, and inflation.

“The worldwide inflation, the war in Ukraine and Russia, the continued increase in the prices of oil and oil products, and the recession in the US and Europe led to the tightening of policy,” mentioned Colegio de San Juan de Letran Graduate School, Dean Emmanuel J. Lopez.

“This naturally prohibits the outpouring of funds coming from foreign sources which will give rise to an economic slowdown,” he adds.

In August, inflation increased to 6.3%, which was the fifth consecutive month that it went past the 2 – 4% target of the BSP.

To counter this, the BSP increased the policy rate to 3.75% or 50 basis points (bps).

Source: Business World