The Bangko Sentral ng Pilipinas reported on Tuesday that foreign direct investments (FDI) registered net inflows of $242 million in May 2019, 85.1 percent lower than the $1.6 billion in net inflows recorded in May 2018.

This was the result as net investments in debt instruments declined from $1.3 billion in May 2018 to $149 million in May 2019 because of higher prepayments and repayments of debt owed by resident enterprises to their foreign affiliates, along with a decline in borrowings from their foreign affiliates.

“Moderate net inflows of equity capital amounting to US$1 million from US$241 million a year ago also contributed to the decline in FDI,” the statement said.

Bulk of the equity capital placements during the month came from the United States, Japan, Singapore, China and Hong Kong.  The capital infusions were invested largely in the real estate, manufacturing, financial and insurance, construction and human health and social work sectors.

Reinvestment of earnings amounted to $92 million, 15.9 percent higher than $80 million recorded in the same month last year.

In the five months since January 2019, FDIs recorded $3.1 billion in net inflows, lower by 37.1 percent than the $5 billion in net inflows in the comparable period last year.

This was due to the drop in equity capital investments. Placements declined to $787 million in January to May 2019, from $1.5 billion last year, as withdrawals increased to $451 million from $139 million last year.

Net investments in debt instruments decreased by 26 percent to $2.4 billion in January to May 2019 from $3.2 billion from January to May 2018.

Equity capital placements came mostly from Japan, the United States, China, Singapore and South Korea.  These were channeled largely to the financial and insurance, real estate, manufacturing, transportation and storage, administrative and support service sectors.

Reinvestment of earnings grew by 12.9 percent to $418 million in January to May 2019 from $ 731 million in the same period last year. (Melo M. Acuña)