The net foreign direct investments (FDIs) in the Philippines has dropped to $460 million in July 2022 from &1.3 billion in the same month last year, the lowest since the $455 million record in May last year.
In a press release posted by the Bangko Sentral ng Pilipinas (BSP), the Central Bank showed that the cumulative net inflows from January to July this year was $5.1 billion, a 12% lower compare to last year’s $5.8 billion for the first seven month.
As defined by the Philippine Statistics Authority, FDI is made by a resident entity in one economy (direct investor) with the objective of establishing or obtaining a lasting interest in an enterprise resident in an economy other than that of the investor. It is also a form of international investment where a foreign entity invests, or sometimes controls the ownership, in a local entity.
For example, an international construction company invests in a private construction firm in the country to bid for a soon-to-be road project.
Another example is an international crypto exchange that will build a local headquarters to be able to secure a license and expand its audience in the country.
According to BSP, all major FDI components yielded lower net inflows in January-July 2022 because foreign investors remained cautious amid continued adverse global conditions.
“In July 2022, FDI net inflows decreased due largely to the lower non-residents’ net investments in debt instruments of their local affiliates. This decrease more than offset the growth in their net investments in equity capital,” the monetary authority explained.
Lastly, the BSP disclosed that equity capital infusions for the month of July came from Singapore, Japan, and the United States.
The mentioned countries invested heavily in some industries in the country such as construction, manufacturing, and real estate.
Just last month, President Ferdinand “Bongbong” Marcos Jr. visited the United States for a working trip. The trip could generate about $4 billion of investment, according to Malacañang. The same Marcos trip in Singapore is expected to generate more investments in the country.
This article is published on BitPinas: Foreign Direct Investments Reaches $460m in July, Lowest in 14 Months – BSP Data
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