foreign investments in the Philippines

Foreign direct investments down 24.6% in 2020 due to pandemic

Ralf Rivas

BUSINESS DISTRICT. Skyline of Makati City.

File photo by Alecs Ongcal/Rappler

'The disruptive impact of the pandemic on global supply chains and the weak business outlook adversely affected investor decisions in 2020,' says the Bangko Sentral ng Pilipinas

Foreign direct investments (FDI) contracted by 24.6% to $6.5 billion in 2020 from $8.7-billion net inflows in 2019, mainly due to the economic impact of the coronavirus pandemic.

“The disruptive impact of the pandemic on global supply chains and the weak business outlook adversely affected investor decisions in 2020,” the Bangko Sentral ng Pilipinas (BSP) said on Wednesday, March 10.

This is the 3rd consecutive decrease in FDI since it peaked in 2017. (READ: PEZA to investors: Please don’t leave Philippines)

In December 2020, FDI saw a 62.6% drop. The BSP noted, however, that this is due to significantly large inflows in December 2019, resulting in what’s called a base effect.

On a yearly basis, non-residents’ net investments in debt instruments contracted by 22% to $4.1 billion in 2020 from $5.2 billion in 2019. 

Likewise, non-residents’ net equity capital investments dropped by 35.7% to $1.5 billion in 2020 from $2.3 billion.

Bulk of the equity capital placements in 2020 came from Japan, the Netherlands, United States, and Singapore.

Capital infusions were directed mainly to manufacturing, real estate, and the financial and insurance industries. – Rappler.com

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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.