NET foreign direct investments (FDI) surged in January, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday, growing by 89.9 percent to $907 million from $478 million a year earlier.

A Cabinet official said the results reflected confidence in the Philippines' economic potential while an analyst said these could have been realized commitments from the Marcos government's push to lure foreign investors.

January's increase, the BSP said in a statement, was primarily due to a 173.2-percent growth in nonresidents' net investments in debt instruments to $820 million from $300 million.

Reinvestments of earnings also grew, by a much more modest 16.4 percent, to $99 million from $85 million.

However, nonresidents' net investments in equity capital posted net outflows of $11 million, reversing from the $93 million in net inflows in January last year.

Japan accounted for the bulk of FDI, which was mostly channeled to manufacturing (33 percent), real estate (24 percent), construction (20 percent), and wholesale and retail trade (16 percent).

'Economic potential'

In a separate statement, Trade Secretary Alfredo Pascual said "the surge in FDIs reflects the unwavering confidence and steadfast trust the global business community places in the Philippines' economic potential."

"This only strengthens our commitment to further improve the country's business environment to attract even more foreign investments, which, in turn, will create more jobs and sustain our economic growth," he added.

Pascual said that efforts were focused on key sectors such as manufacturing, real estate, construction, and wholesale and retail trade, which the Trade department said partly contributed to the increase in net FDI.

January's FDI surge marked a third consecutive month of higher growth compared to year-earlier results, the department also said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort, meanwhile, attributed the surge in net FDI to "improved economic and financial markets performance in recent months."

"Increased FDIs could have also partly been brought about by some realized investment commitments made for more than a year already during the various foreign trips of the administration," he added.

"For the coming months, possible cuts in the global and local policy rates later in 2024 ... could also lead to some pick up in FDIs."

The Trade Department said it remained "focused on further attracting significant investments in these essential sectors and other high-growth industries."

"By bolstering these foundational industries, the Philippines can create a more robust and resilient economy."

It noted that the FDI announcement came as Pascual would be meeting with US Commerce Secretary Gina Raimondo and Japanese Trade Minister Ken Saito in Washington, D.C. on April 11 as part of a trilateral summit between the three countries.

"Past engagements, including Secretary Raimondo's successful trade and investment mission to the Philippines and discussions during the Asean-Japan Economic Co-Creation Forum, have set the stage for future collaborations," it added.

"The upcoming trilateral meeting is expected to unlock further trade and investment opportunities, in alignment with the government's objectives to improve infrastructure, upskill workers, ensure environmental sustainability, and invigorate the private sector with meaningful initiatives."