Foreign direct investment (FDI) inflows fell for the first time in eight months in January, as omicron-driven growth in coronavirus infections and stricter restrictions dampened investor sentiment.
FDI net flow decreased by 16% from $ 975 million to $ 819 million One year ago, on Monday evening, based on information released by Banco Central NG Pilipinas (BSP).
It was StayThe first annual decline in FDI inflows in eight months or 20.3% in May 2021 to $ 452 million.
Month-on-month, FDI fell 23% from $ 1.1 billion in December.
The revival of the highly contagious Omicron Covid-19 variant in the country and the re-imposition of strict quarantine measures in early January 2022 could be due to investor concerns, the central bank said in a statement.
The government placed Metro Manila and some provinces under Level 3 alert in January to prevent the spread of the Omicron variant. As the COVID-19 cases decreased, restrictions beginning in March were relaxed to the most modest level.
The recession of FDI is mainly due to signageStayEquity cannot place capital in place in a month, BSP said.
FDI in equity capital fell 70.3% to $ 107 million in January from $ 360 million a year earlier. Placement decreased 68.2% to 118 million, while withdrawals increased 6.8% to $ 11 million.
Equity placements were originally from Japan, the United States, the Netherlands, and Malaysia. These were invested in production; Electricity, gas, steam and air conditioning; Finance and insurance; And the real estate industry.
Shares of equity and investment funds also fell 58% to $ 184 million in January from $ 439 million a year earlier.
Meanwhile, revenue reinvestment fell 1.4% to $ 78 million from $ 79 million a year earlier.
In the FDI segment, the flow in debt instruments alone increased to $ 634 million, up 18.3% in January from $ 536 million a year earlier.
John Paolo Rivera, an economist at the Asian Institute of Management, said FDI could be revived in the next few months as the Cowid-19 case continues to decline and business activity improves.
In a Viber message, he said, “FDI should be increased because of the lawsuit, the resumption of the economy and better economic prospects for the rest of the year.”
Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, said the war in Ukraine could hurt the mood of global investors.
“The Russia-Ukraine war could further disrupt the global supply chain in terms of a slight decline in global trade (both exports and imports) and the potential drag on some investment activities,” he said in a Viber message.
Global oil prices have risen since Russia invaded Ukraine on February 24. Although the Philippines has limited trade and economic relations with Russia and Ukraine, it is oneffEcted by high oil and product prices.
Investors will also be closely monitoring the results of the May national elections.
“This (FDI improvement) trend may change depending on who wins – the market choice. Yes, the choice of the people is important, but FDI is a matter of choice in the market and not necessarily of the people, “said Mr Rivera.
Former Senator Ferdinand R. Marcos Jr., the son of the country’s late dictator, is running for president on May 9.
A Bloomberg poll of economists last month showed that Vice-President Leonor G. Robredo is the preferred bet of investors and analysts.
“For planned investments, investors look to concrete platforms in the short, medium and long term, proof of the notion that policies are implemented and transparency with anti-corruption and red tape that will create a favorable environment for investment,” Mr Rivera said.
The central bank last month raised its FDI estimate for 2022 from $ 8.5 billion to $ 11 billion, citing the continued recovery of economic activity and the implementation of investment-friendly reforms.
In FDIflows reached an all-time high of .5 10.5 billion in 2021, rebounding from $ 6.822 billion in 2020. – Loose Wendy T. Nobel