This positive development brought the FDI net inflows for the first four months of the year to US$3.4 billion, higher by 12.1 percent than the US$3.1 billion net inflows in January-April 2021 (Figure 1).
Cumulative FDI net inflows rose due mainly to the increase in non-residents’ net investments in debt instruments.
Meanwhile, net equity placements (other than reinvestment of earnings) declined during the period.
In April 2022, net inflows of FDI rose following the increases recorded across all components, led by non-residents’ net investments in debt instruments.
Equity capital placements also expanded, which were mostly investments from Malaysia, the United States, and Japan. These were channeled primarily to the 1) construction; 2) real estate; 3) professional, scientific, and technical; and 4) manufacturing industries.
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.
 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.