Foreign investments continued sharp downtrend in April

Photo from: Bangko Sentral FB page


The amount of long-term equity investments entering the Philippines from abroad declined sharply in April, extending a downtrend experienced in the first quarter, which the central bank attributed to the onset of the coronavirus pandemic.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said foreign direct investments registered net inflows of $311 million in April 2020, representing a decline of 67.9 percent from $971 million in the same month last year.

“The slowdown in [investment] inflows reflected the continued weak global and domestic demand prospects, prompting many investors to put on hold investment plans amid the unresolved COVID-19 pandemic,” the central bank said.

The drop in foreign direct investment net inflows last April resulted from lower net investments in debt instruments, which declined by 73.2 percent to $223 million, and in equity capital, which decreased by 82.6 percent to $7 million.

In particular, equity capital placements fell by 68.3 percent to $47 million from $147 million.

The bulk of the equity capital placements were sourced from Japan, the United States, Singapore and Germany. These investments were channeled mostly to the manufacturing, wholesale and retail trade, and real estate industries.

Likewise, reinvestment of earnings decreased by 15.8 percent to $81 million from $96 million in the same period last year.

As a result of these developments, foreign direct investment net inflows during the first four months of the year reached $2 billion, lower by 32.1 percent than the $2.9 billion in net inflows recorded in the comparable period last year.

This was due largely to the 53-percent decline in net investments in debt instruments to $1.1 billion from $2.2 billion. In addition, reinvestment of earnings contracted by 21.7 percent to $269 million from $343 million a year ago.


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