Invest Daily Pro
  • Economy
  • Investing
No Result
View All Result
  • Economy
  • Investing
No Result
View All Result
Invest Daily Pro
No Result
View All Result
Home Top News

June FDI net inflows at four-year low

by
September 10, 2024
in Top News
0
June FDI net inflows at four-year low
0
SHARES
6
VIEWS
Share on FacebookShare on Twitter
JOHN GUCCIONE-PEXELS

By Aaron Michael C. Sy, Reporter

PHILIPPINE foreign direct investment (FDI) net inflows sank to an over four-year low in June amid lower placements across all instruments, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.

The inflows fell by 29% to $394 million from $555 million a year ago, preliminary data from the BSP showed.

Month on month, net inflows dropped by 27.55% from $510 million in May.

June’s net inflow was the lowest level since the $314 million recorded in April 2020.

“The decline resulted from lower net inflows across all major FDI components,” the BSP said.

Nonresidents’ net investments in debt instruments declined by 30% year on year to $213 million in June from $304 million, central bank data showed. These consist mainly of intercompany borrowing or lending between foreign direct investors and their subsidiaries or affiliates in the Philippines.

Net investments in equity capital other than the reinvestment of earnings likewise went down by 33.2% to $74 million from $111 million a year ago.

Equity capital placements slid by 34.09% year on year to $87 million, while withdrawals dropped by 38.1% to $13 million.

Reinvestment of earnings also decreased by 23.4% to $107 million from $140 million a year ago, while investments in equity and investment fund shares dropped by 27.89% to $181 million.

By source, equity capital placements were mainly from Japan (47%), followed by the United States (15%), Sweden (14%) and Singapore (14%).

These were invested mainly in the manufacturing (48%), real estate (18%), wholesale and retail trade (16%) and financial and insurance (11%) sectors.

NET INFLOWS RISE IN FIRST HALFMeanwhile, in the first semester, FDI net inflows increased by 7.9% to $4.4 billion from $4.1 billion a year earlier, BSP data showed.

Investments in equity and investment fund shares rose by 32.7% year on year to $1.71 billion in the January-to-June period.

Net foreign investments in equity capital surged by 62% to $1.197 billion in the six-month period. Placements went up by 57.9% to $1.158 billion and withdrawals rose by 41.5% to $261 million.

These placements mostly came from the United Kingdom (52%), followed by Japan (30%) and the United States (7%), and were mostly invested in the manufacturing (77%) and real estate (10%) industries.

Meanwhile, net investments in debt instruments went down by 3.4% to $2.725 billion in the first semester from $2.821 billion a year ago.

Reinvestment of earnings also dropped by 6.7% to $514 million.

FDI net inflows slumped in June due to elevated interest rates, as the market at that time was still uncertain about the start of the monetary easing cycles of both the BSP and US Federal Reserve, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Monetary Board on Aug. 15 reduced its policy rate by 25 basis points (bps) to 6.25%, its first easing move in nearly four years. Prior to the cut, the BSP kept its policy rate at an over 17-year high of 6.5% for six straight meetings following cumulative hikes worth 450 bps between May 2022 and October 2023 to rein in inflation.

BSP Governor Eli M. Remolona, Jr. has said they could cut rates by another 25 bps within the year. The Monetary Board’s last two policy-setting meetings this year are on Oct. 17 and Dec. 19.

Meanwhile, the Fed is widely expected to begin its easing cycle at its Sept. 17-18 policy meeting, with markets pricing in a 25-bp cut at the review and 100 bps in reductions for this year. The US central bank has kept the federal fund target rate at 5.25%-5.5% range following increases worth 525 bps from March 2022 to July 2023.

Still, FDI inflows grew year on year in the six months ending June as the Philippines posted robust economic growth last quarter compared with other countries in the region, Mr. Ricafort said.

Philippine gross domestic product (GDP) expanded by 6.3% in the second quarter, bringing first-half growth to 6% and meeting the low end of the government’s 6-7% target for the year.

At 6.3%, the Philippines’ GDP growth was the second-fastest in the April-to-June period, only behind Vietnam (6.9%). It was ahead of Malaysia (5.8%), Indonesia (5%) and China (4.7%).

“For the coming months, further cuts in BSP and Fed rates amid the easing inflation trend would further reduce borrowing costs that would help spur greater global investments, business, and other economic activities worldwide, which would thereby help boost FDIs,” Mr. Ricafort said.

“We expect [FDIs] to get better as we have seen so far this July-August, particularly, as BSP did a rate cut within the period mentioned,” Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

The central bank expects to end 2024 with $9.5 billion in FDI net inflows. In 2023, net inflows fell by 6.6% year on year to $8.9 billion.

ShareTweetPin

Related Posts

Have a taste of the perfect day in paradise with SULÀ Spirits
Top News

Have a taste of the perfect day in paradise with SULÀ Spirits

January 8, 2025
First months of 2025 likely rainy amid La Niña conditions, says PAGASA
Top News

First months of 2025 likely rainy amid La Niña conditions, says PAGASA

January 8, 2025
December inflation rises to 2.9%
Top News

December inflation rises to 2.9%

January 7, 2025
Outstanding debt hits fresh high of P16.09T
Top News

Outstanding debt hits fresh high of P16.09T

January 7, 2025
Outstanding debt hits fresh high of P16.09T
Top News

Outstanding debt hits fresh high of P16.09T

January 7, 2025
PHL end-December dollar reserves drop to $106.8B
Top News

PHL end-December dollar reserves drop to $106.8B

January 7, 2025
Next Post
£150,000 available to support North-West entrepreneurs from disadvantaged backgrounds

£150,000 available to support North-West entrepreneurs from disadvantaged backgrounds

Recommended

Cybersecurity Market Forecast: Top Trends for Cybersecurity in 2025

Cybersecurity Market Forecast: Top Trends for Cybersecurity in 2025

January 9, 2025
The art of shaping opportunities: The EY Entrepreneur Of The Year 2024 Philippines

The art of shaping opportunities: The EY Entrepreneur Of The Year 2024 Philippines

September 23, 2024
“HPS Advanced Pigging Technology Helps Lubricant Manufacturer Reduce Waste and Improve Efficiency”

“HPS Advanced Pigging Technology Helps Lubricant Manufacturer Reduce Waste and Improve Efficiency”

October 31, 2024
RLC bets on premium demand to drive Le Pont Tower 2 sales

RLC bets on premium demand to drive Le Pont Tower 2 sales

August 19, 2024
Retirement planning is Filipinos’ top financial goal

Retirement planning is Filipinos’ top financial goal

October 24, 2024
The many colors of love and death in Once on This Island

The many colors of love and death in Once on This Island

September 10, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 InvestDailyPro. All Rights Reserved.

    Disclaimer: InvestDailyPro.com, its managers, its employees, and assigns (collectively InvestDailyPro ) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
    The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    No Result
    View All Result
    • About us
    • Contact us
    • Home
    • Privacy Policy
    • Suspicious engagement
    • Terms & Conditions
    • Terms & Conditions
    • Thank you

    Copyright © 2024 investdailypro.com | All Rights Reserved