foreign investments in the Philippines

Foreign direct investments leap 41.5% in January 2021 as PH eases lockdowns

Ralf Rivas
Foreign direct investments leap 41.5% in January 2021 as PH eases lockdowns

INVESTMENTS. Makati City's skyline.

Photo from Shutterstock

Foreign companies lend more cash to their local counterparts, driving the surge in FDI

Foreign direct investments (FDI) soared by 41.5% in January 2021 as the Philippines loosened coronavirus restrictions, latest figures of the Bangko Sentral ng Pilipinas (BSP) showed.

FDI net inflows reached $961 million in January 2021 from $679 million in the same month in 2020, supported mainly by the 116% expansion in non-residents’ net investment in debt instruments or the amount foreign firms lent to local counterparts.

Foreign companies extended loans to local affiliates totaling $535 million during the month from $248 million a year ago.

“This development reflects the investors’ optimism at the start of the year due in turn to the gradual reopening of the economy under the ‘new normal’ condition, easing of lockdown measures, and positive news about the rollout of COVID-19 vaccines,” the BSP said.

Similarly, net investment in equity capital marginally inched up by 0.5% to $351 million from $350 million.

Equity capital placements during the period were mostly from Singapore, Japan, and the Netherlands. They were channeled mostly to financial insurance, manufacturing, and professional, scientific, and technical industries.

For 2021, the BSP is aiming for FDI to reach $7.8 billion.

FDI is the most coveted type of investment, as it generates jobs and increases local knowledge on industries.

It has been on decline since peaking in 2017. –

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.