​Foreign direct investment (FDI) net inflows sustained its growth momentum in December 2021, increasing by 59 percent year-on-year to reach $1.1 billion from the $671 million net inflows in December 2020.

This development brought the full-year 2021 FDI net inflows to a new record level of $10.5 billion, breaching the previous high of $10.3 billion in 2017.

The 2021 level represents a 54.2 percent increase from the $6.8 billion net inflows recorded in 2020.

The growth in FDI reflected continued positive foreign investor sentiment on the country amid expectations of a rebound in domestic economic activity and declining COVID-19 reported cases, as well as the strengthening of the global economy.

The cumulative net inflows rose on the back of the 80.4 percent expansion in non-residents’ net investments in debt instruments to $7.5 billion from $4.2 billion in 2020.

Likewise, reinvestment of earnings grew by 34.7 percent to $1.3 billion from $944 million. Non-residents’ net investments in equity capital (other than reinvestment of earnings) registered a moderate growth of 0.7 percent and settled at $1.7 billion.

Equity capital placements amounted to $2.1 billion, while withdrawals stood at $399 million. Equity capital placements originated mostly from Singapore, Japan, the United States, and the Netherlands.

Capital infusions were channeled mainly to the manufacturing; electricity, gas, steam, and air-conditioning; financial and insurance; and real estate industries.

The increase in the FDI net inflows in December 2021 was mainly due to the 60 percent growth in non-residents’ net investments in debt instruments to $634 million from $396 million in December 2020.

Similarly, non-residents’ net investments in equity capital (other than reinvestment of earnings) registered a 59.5 percent upturn to $336 million from $211 million in the comparable month in 2020.

Net investment in equity capital rose as the increase in equity capital placements (to $371 million from $231 million) more than offset the rise in equity capital withdrawals (to $35 million from $20 million).

Equity capital placements during the month emanated largely from Singapore, Japan, and the Netherlands. These were directed mainly to the electricity, gas, steam, and air-conditioning; manufacturing; and financial and insurance industries.

Meanwhile, reinvestment of earnings amounted to $96 million in 2021, up by

50.3 percent from $64 million. BSP