FDI Registers US$901 Million Net Inflows in November 2024

Foreign direct investment (FDI) registered net inflows of US$901 million in November 2024.  This represents a decline of 19.8 percent from the US$1.1 billion net inflows recorded in November 2023 (Figure 1).^1,2

By component of FDI, nonresidents’ net investments in debt instruments contracted by 17.9 percent to US$791 million in November 2024 from US$964 million in November 2023.³ Similarly, nonresidents’ net investments in equity capital (other than reinvestment of earnings) declined by 58.9 percent to US$35 million from US$85 million.  Nonresidents’ reinvestment of earnings remained broadly stable at US$74 million.  The bulk of the equity capital placements in November 2024 came from Japan, the United States, and Singapore.  These investments were primarily channeled into the manufacturing, real estate, financial and insurance, and administrative and support service industries.

Notwithstanding the decline in FDI net inflows during the month, the cumulative FDI level increased by 4.4 percent to US$8.6 billion in January-November 2024 from US$8.2 billion in January-November 2023 (Figure 2).

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¹ BSP statistics on FDI are compiled based on the Balance of Payments and International Investment Position Manual, 6th Edition (BPM6). FDI includes investment by a nonresident direct investor in a resident enterprise, where the equity capital in the latter is at least 10 percent. It also includes investment made by a nonresident subsidiary or associate in its resident direct investor. FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.

² BSP FDI statistics are different from the investment data of other government sources. BSP FDI covers actual investment inflows. In contrast, the approved foreign investments data published by the Philippine Statistics Authority (PSA) are sourced from Investment Promotion Agencies (IPAs). These represent investment commitments, which may not necessarily be fully realized in a given period. Furthermore, the PSA data are not based on the 10-percent foreign ownership criterion under BPM6. Additionally, the BSP’s FDI data are presented in net terms (i.e., equity capital placements less withdrawals). On the other hand, the PSA’s foreign investment data do not account for equity withdrawals.

³ Net investments in debt instruments consist mainly of intercompany borrowing and lending between foreign direct investors and their subsidiaries or affiliates in the Philippines. The remaining portion of net investments in debt instruments are investments made by nonresident subsidiaries or associates in their resident direct investors. This is known as reverse investment.