FDIs decline by 10%
The Philippines’ net foreign direct investments (FDI) dropped by 10 percent to $6.71 billion in September compared to the previous year’s $7.46 billion.
“FDI remained subdued amid lingering concerns on the global economic slowdown, higher inflation, and the depreciation of the peso,” said the Bangko Sentral ng Pilipinas (BSP).
Recently, the Monetary Board, reduced the net FDI projection for this year to $8.5 billion from its initial target of $10.5 billion in October. For 2023, however, the BSP expects a more upbeat FDI of $11 billion.
In September the net FDI decreased by 7.9 percent to $626 million compared to $680 million in the same period in 2021.
“For 2022, external sector prospects continue to be primarily constrained by elevated global inflation which has prompted central banks to maintain an aggressive monetary tightening stance, with attendant effects on growth and demand. Against this backdrop, the key growth drivers that supported domestic recovery, that of expanded vaccine coverage and a gradual full reopening of the economy, have also resuscitated high-value services exports which were earlier hampered by the pandemic, such as travel and travel-related activities as well as BPO services,” said BSP.
BSP noted that in the first three quarters of 2022, FDIs mostly came from Japan, Singapore, US, and Malaysia.
The latest 2022 and 2023 FDI estimates factored in the lower global growth outlook and tighter financial conditions.
