BSP: Foreign Investments Tumbled After FDIs Softened In Nov 2022

Bangko Sentral ng Pilipinas (BSP) released data that the country’s net foreign direct investments plummeted by 43.6% settling at $793 million in November 2022 compared to $1.4 billion in investments last year.

The data represents capital that actually moved, instead of planned commitments that may not push through, having a better gauge of investor preferences.

The BSP said the significant decrease in the net FDI inflow in November was mainly due to a net drop in investments in securities and earnings kept on shore instead of being sent to investors’ home base. This failed to offset an increase in equity placements.

Most of the equity capital placements in November were from Japan, Singapore, and the United States that invested in the manufacturing, information and communication, and real estate industries.

The chief economist of Rizal Commercial Banking Corp. Michael Ricafort said despite the drop in November, the net FDI inflow was still near the highest recorded since the pandemic started.

“The year-on-year decline may have to do with higher base or denominator effects – after $1.408 billion a year ago or in November 2021,” Ricafort said.

He also said the slowdown may be due to higher interest rates in the United States and the looming recession that affected investments and FDIs.

“For the coming months, net FDI inflows could still be sustained at high levels since the pandemic started, as the economy has reopened toward greater normalcy and still expected to have one of the fastest growth rates in the region,” he added.

Source: Inquirer.net