PH FDI Inflows Reach $499M in May

Net inflows of foreign direct investments (FDI) reached $499 million in May 2024, according to the Bangko Sentral ng Pilipinas (BSP).

This marked a slight decline of 1% from the $504 million recorded in May 2023.

The decrease was largely due to a significant 31.7% drop in nonresidents’ net investments in equity capital, which fell to $161 million from $235 million in the same month last year.

Reinvestment of earnings also saw a small decrease of 3.7%, amounting to $97 million. However, nonresidents’ net investments in debt instruments increased by 43.4% to $242 million, partially offsetting the declines.

For the first five months of 2024, FDI net inflows grew by 15.8% to $4.0 billion, up from $3.5 billion in the same period in 2023.

The top sources of these investments in May included Japan, the United States, and Hong Kong, with funds primarily going to manufacturing, real estate, and arts, entertainment, and recreation industries.

Economist Michael Ricafort of Rizal Commercial Banking Corporation attributed the slight decline in May to geopolitical risks, such as the conflicts between Iran and Israel, and higher interest rates.

However, he noted that the Philippines’ strong economic growth and the potential for lower interest rates later in the year could attract more FDI in the coming months. (ASC)