MANILA, Philippines - Net inflow of foreign direct investments (FDI) plunged in January as uncertainties in the global front, such as those brought about by weakness of advanced economies, prompted fund owners to exercise prudence in making business decisions.
The Bangko Sentral ng Pilipinas on Wednesday reported that FDIs posted a net inflow of $576 million (S$713 million) in January, down 45 per cent from the $1.05 billion (S$1.3 billion) in the same month last year.
Gross inflow of FDIs reached US$1.29 billion (S$1.6 billion), up by about 20 per cent from US$1.08 billion (S$1.34 billion).
However, the effect of higher gross FDI inflow was wiped out by the surge in FDI outflow. FDI outflow hit US$711 million (S$880 million), about 32 times the US$22 million (S$27.23 million) registered in January last year.
Monetary officials said the ability of the Philippines to attract investments partly hinges on developments in the global economy. The prolonged crisis in the eurozone and the anemic growth of the US economy are seen as dragging down growth prospects for the global economy, thus affecting the appetite to invest even in economies that are performing favourably.
The BSP, however, believes the net FDI inflow in January was significant enough to meet the government's 2013 projections on foreign investments.