Of the $1.34 trillion direct investments in 2023 in the Asia Pacific region, the Philippines received the least share of these monies.
Foreign investors pumped in $1.34 trillion worth of direct investments in over 16,000 cross border projects, a 4.4 percent jump from 2022, creating 2.8 million jobs in 2023 for 17,078 green projects.
The report, published at the Financial Times said that “regionally, western Europe attracted the highest number of FDI projects in 2023 with more than 4,700 projects—up by 15.6 percent from a year earlier. However, Asia Pacific [AsPac] was the leading destination for capital investment with the value increasing from $330 billion in 2022 to $450 billion in 2023,” Business Mirror reported.
In terms of new projects that received FDI in 2023, the Philippines ranked the lowest in AsPac with only 155 new projects funded by capital last year, although this was 17.45 percent higher than in 2022. It tied with Thailand with 155 new projects, up 72.2 percent, year on year.
India topped the projects that received FDI at 1,006; followed by China with 423 projects (+24.8 percent); Singapore with 409 (+1.51 percent); Australia with 354 (-16.7 percent); Vietnam with 295 (+64.8 percent); Malaysia with 205 (+42.4 percent); Japan with 191 (-2.1 percent); Indonesia with 165 (+68.4 percent); and Thailand and the Philippines.
Earlier, the BSP said the net inflow of FDI dropped by 6.6 percent to $8.86 billion from some $9.5 billion in 2022. It was the second year in a row that FDI to the Philippines decreased.
Top FDI sources were Japan, the United States, Singapore, and Germany, which went mostly to the manufacturing, real estate, and financial and insurance sectors.
The FDI report said “maintaining its position as the leading destination region for FDI, Asia Pacific performed well in 2023. Capital investment into the region increased by 37 percent from 2022 to $449.9 billion in 2023. The number of FDI projects rose by 16 percent from 3,551 in 2022 to 4,115 in 2023, demonstrating a robust recovery from the effects of the Covid-19 pandemic.”
The renewable energy sector received the bulk, at 17 percent, of FDI projects last year, and reached $77.8 billion in RE investment.
“This follows a broader trend in APAC between 2019 and 2023, when capital investment from FDI shifted towards projects supporting the green transition as part of the region’s post-pandemic recovery,” reported Business Mirror
This was followed by coal, oil, and gas with $41 billion; semiconductors with $34 billion; metals with $331.1 billion; and real estate with $32 billion.
Worldwide, the US remained the top source of FDI capital last year, but China followed closely on its heels “as Chinese companies went on an international investment spree after Beijing finally lifted Covid-19 restrictions.”
Most of the capital investments went to the renewable energy sector for the fourth year in a row, despite slipping by 6.6 percent to $343 billion in 2023, and funding 856 projects. This was followed by the electronic components sector with $114.8 billion (+24 percent); the coal, oil and gas sector with some $93.9 billion (-19 percent); semiconductors with $55.2 billion (-50 percent).
“Ultimately, China’s FDI trajectory mirrors that of its economic development,” according to reports.
For years, China has been the factory of the world, absorbing billions of dollars in FDI by manufacturers looking for a cost-convenient base to produce goods bound for exports at scale.
That exports-led model is now transforming into a model driven by domestic consumption, Business Mirror said..
As such, the country may need less inbound capital, while its domestic companies are looking abroad to invest the capital they have accumulated over the years. No wonder that its outbound-to-inbound FDI ratio touched a new high in 2023, at 82.13 percent,” said FDI Intelligence.
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