Foreign direct investment (FDI) net inflows to the Philippines grew by 5.5% year-on-year in July 2024, reaching $820 million, according to the Bangko Sentral ng Pilipinas (BSP).
Thie increase was driven by higher net inflows across all FDI components, signaling sustained investor confidence in the country’s economic prospects.
The July figure marks an improvement from the $778 million net inflows recorded in the same month last year, with the bulk of the investments coming from Japan, the United States, and Singapore.
These investments were mainly directed toward the manufacturing and real estate industries, sectors that continue to attract foreign interest.
“Nonresidents’ net investments in debt instruments rose by 2.7% to $610 million, from $594 million in July 2023,” the BSP reported, highlighting the growing appetite for Philippine debt instruments. Similarly, nonresidents’ reinvestment of earnings saw a 12.8% increase to $135 million, while net investments in equity capital, excluding reinvestments, jumped by 16.8% to $76 million.
The latest data brings the total FDI net inflows for the January to July period of 2024 to $5.3 billion, representing a 7.5% rise compared to the $4.9 billion recorded in the same period last year. The positive trend reflects growing investor confidence in the Philippines’ long-term economic prospects despite global economic uncertainties.
The BSP’s FDI data, which tracks actual investment inflows, differs from investment commitments reported by other government agencies. For instance, the Philippine Statistics Authority (PSA) tracks investment pledges from investment promotion agencies, which may not necessarily result in realized investments.
The BSP’s data, on the other hand, is based on actual cash inflows and reflects equity capital placements, reinvestments of earnings, and intercompany borrowing/lending.
“FDI growth is crucial for the country’s continued economic recovery and expansion,” the BSP noted, adding that strong investor interest in key industries such as manufacturing and real estate is helping drive the country’s industrial growth.
With FDI playing a pivotal role in job creation, technology transfer, and boosting the competitiveness of local industries, the BSP remains optimistic that this trend will continue in the coming months as the government ramps up efforts to attract more foreign investments.
The positive FDI performance in the first seven months of 2024 reflects the Philippines’ improving investment environment, driven by policy reforms and the government’s focus on economic recovery. As the country continues to recover from the impact of the pandemic, foreign investments are expected to play a vital role in sustaining long-term growth and development.
