Net foreign direct investments (FDIs) in November 2022 stood at USD793 million, the Bangko Sentral ng Pilipinas (BSP) reported Friday.

The central bank said net FDI inflows last November declined by 43.6 percent from USD1.4 billion net inflows in the same month in 2021.

“This resulted from the drop in non-residents’ net investments in debt instruments and reinvestment of earnings. Meanwhile, net placements of equity capital rose year-on-year for the third consecutive month,” the BSP said in a statement.

Rizal Commercial Banking Corp. (RCBC) economist Michael Ricafort said the drop in net inflows may be attributed to higher base effects in November 2021, when appetite for investments went back after the onset of the pandemic in 2020.

“The slowdown in the net FDI data may also have to do with higher short-term interest rates and the peak in long-term interest rates in the United States/globally/locally around October-November 2022,” Ricafort said, adding these developments increased borrowing costs.

He added the possible recession in the US also dragged the investment activities at the latter part of 2022.

Further, the BSP reported that top sources of equity capital placements in November 2022 include Japan, Singapore and the US.

Top sectors with equity capital placements for the month include manufacturing, information and communication, and real estate industries.

“The year-to-date FDI net inflows likewise declined by 13.4 percent to USD8.4 billion from the USD9.7 billion recorded in the first eleven months of 2021. By component, non-residents’ net investments in debt instrument and reinvestment of earnings declined while their net placements of equity capital increased during the period,” the central bank said.

Meanwhile, RCBC’s Ricafort said the recent foreign trips of President Ferdinand R. Marcos Jr., including his five-day official working visit to Japan this week, posed positive prospects for the country’s FDI inflows in the future.

“Investment commitments, especially if realized/monetized, from the various foreign trips by the new administration could also help generate more investments (FDIs), jobs/employment, infrastructure spending/projects, trade (exports and imports), foreign tourism, and business/economic opportunities that add to the overall economic/GDP growth and development, as well as support higher investment valuations, thereby also supporting sentiment on the local financial markets,” Ricafort added. (PNA)