By means of Luisa Maria Jacinta C. Jocson, Reporter
Net intake of Direct Foreign Investments (BDI) into the PhilIn 2024, IPPines stood up by only 0.1%, but in December to the lowest monthly count in 11 years, in the middle of Uncertainty in global trade, data of the central bank showed.
Provisional data from the Bangko Sentral NG Pilipinas (BSP) showed FDI -Netto inflow that were higher to $ 8.93 billion in 2024 from $ 8.925 billion in 2023, ending two consecutive years.
The FDI count of 2024 was also the highest in two years, but under the forecast of the $ 9 billion.
The shares of investments in shares and investment funds rose by 13.1% to $ 2.7 billion in 2024 of $ 2.39 billion in 2023.
Last year’s net foreign investments in equity rose by 42.4% to $ 1.54 billion of $ 1.08 billion in 2023.
The placements rose by 4.3% to $ 2.17 billion, while recordings fell by 37.1% to $ 628 million.
BSP data showed that these placements mainly came from Japan (38%), the United Kingdom (35%), the United States (10%) and Singapore (8%).
Investments were usually channeled into production (68%), followed by real estate (12%) and information and communication (5%) industry.
In the meantime, net investments in debt instruments amounted to $ 6.23 billion, with 4.7% with $ 6.53 billion in 2023.
The reinvestment of income also fell by 11.2% to $ 1.17 billion of $ 1.31 billion.
December Binking
In December alone, the FDI -Netto intake decreased by 85.2% to $ 110 million from $ 743 million in the same month in 2023.
Month to month, the inflow also fell by 88% of $ 922 million.
December saw the lowest FDI -Netto inflow in 11 years or since the $ 102.16 million included in December 2013.
“Although the net sharing capital investments of non -ethetic rose, DBI decreased as a result of increased debt repayments by resident companies to their non -people -live investors,” said the BSP.
The higher reimbursements of the debt brought net investments in debt instruments to an outflow of $ 19 million in December, a reversal of the inflow of $ 618 million in the same month in 2023.
The reinvestment of income fell by 14.7% year after year to $ 80 million in December from $ 94 million a year ago.
On the other hand, Net investments in share capital rose than the reinvestment of the profit by 58% to $ 49 million in December from $ 31 million in the previous year.
This as stock capital placements fell by 19.4% to $ 185 million, while recordings fell by 31.5% to $ 136 million.
The majority of the placements of shares came from Singapore (42%) per source per source, followed by Japan (23%) and the United States (16%).
These were mainly invested in information and communication (40%), production (20%), financial and insurance (13%), construction (9%) and real estate sector (8%).
In the meantime, the shares of investments in shares and investment funds increased by 3.3% to $ 129 million in December of $ 125 million.
“The sharp decline of the net BDI inflow in December is worrying because it suggests that both financial pressure in the short term at local companies and possible shifts in the sentiment of investors to the economy to the economy,” said Philippine Institute for Development Studies Senior Research Fellow R. Rivera.
He said that the higher reimbursements of debts suggest that residential companies “give priority to delevering over the reinvesting of capital, which can reflect a quick financial conditions or concern about profit margins.”
“Policy uncertainty and global economic risks may have filled in the sentiment of investors, allowing companies to postpone or scales the expansion plans in the Philippines,” Mr Rivera added.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the slump of investment flows could be due to uncertainties of protectionist policy by US President Donald J. Trump.
This may have encouraged “more investments and jobs in the US instead of outside the US that can reduce the BDIs worldwide,” he added.
Before acceptingFICE In January, Mr Trump had announced his plans to impose rates on large trading partners, such as China, Canada and Mexico, as well as an over-the-sign mutual rate for all countries that tax the import.
Mr. Ricafort also mentioned tensions between China and the Philippines, as well as repeat disorders that could have disrupted the investment activity.
“The decrease in the DBI can also be a reflection of the challenges of competitiveness, such as high operating costs, bottlenecks in infrastructure and concerns about the stability of the regulations,” Mr Rivera added.
For the coming months, Mr. Ricafort said that investment flows can be supported by the implementation of the company recovery and the tax stimuli for companies to maximize the opportunities to breathe new life into the Economy Act.
“This allows foreign investors to become decisive in finding the country in the midst of improved stimuli for foreign investors,” he added.
Further interest rates by the US Federal Reserve and BSP could also lower the financing costs and attract more DBIs in the country, Mr. Ricafort said.
Despite the surprise policy break in February, the BSP said that it is still in the relaxation.
BSP -Governor Eli M. Remolona, Jr. has said that this year there is a possibility of a maximum of 50 basic points of tariff reductions. The central bank kept the most important rate stable at 5.75% last month, referring to the uncertainties of global trade.
“Higher global interest rates make borrowing more expensive, discouraging new investments,” said Mr Rivera.
Mr Rivera noted that countries such as Vietnam and Indonesia may have attracted more BDI “because of stronger stimuli or more favorable business environments.”
“Investors can wait for clarity about important economic reforms, tax policy and legal frameworks before they commit capital,” he added.
On the other hand, Mr. Ricafort said that the rate war would continue to weigh on the influx of BDI in the coming months.
“(These) all encourage foreign investors to locate in the US to prevent higher import rates and to create more jobs in the US as part of Trump America-first policy, “he added.
The Central Bank expects to end 2025 with a net DBI inflow of $ 10 billion.
The BSP noted that its DBI data differ from the investment data of other government sources, since it covers the actual investment flows.
“The approved information about the approved foreign investments published by the Philippine Statistics Authority are from bodies for investment promotion. These represent investments that are not necessarily fully realized in a certain period. “