FDI net inflows at US$626 million in September 2022

Based on preliminary data, foreign direct investments (FDI) recorded US$626 million net inflows in September 2022, although 7.9 percent lower than the US$680 million net inflows in the same month last year.12

The decline in FDI net inflows reflected the decrease in non-residents’ net investments in debt instruments, which more than offset the growth in their net equity capital placements (Figure 1).[1]

Bulk of the equity capital placements during the month originated from Singapore, Japan and the United States. These were directed mostly to the 1) financial and insurance; 2) manufacturing; and 3) real estate industries.

For the first three quarters of 2022, FDI net inflows decreased by 10.0 percent to US$6.7 billion from US$7.5 billion in the same period last year. FDI remained subdued amid lingering concerns on global economic slowdown, higher inflation, and the depreciation of the peso (Figure 2).


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

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

[1] Net investments in debt instruments consist mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines. The remaining portion of net investments in debt instruments are investments made by non-resident subsidiaries/associates in their resident direct investors, i.e., reverse investment.