NET foreign direct investments (FDIs) hit a 16-month low in May, the Bangko Sentral ng Pilipinas (BSP) reported late on Monday.
At $499 million, the net inflow is the lowest since January 2023's $478 million. It is also lower compared to the year-earlier $504 million and April's $556 million.
Year to date, however, net FDI rose to $4.0 billion, 15.8 percent up from the $3.5 billion seen in January-May 2023.
April's drop was said to be primarily due to a 31.7-percent plunge in nonresidents' net investments in equity capital (other than reinvestment of earnings) to $161 million from $235 million in May 2023.
Reinvestments of earnings also saw a decline of 3.7 percent to $97 million from $101 million.
Nonresidents' net investments in debt instruments, meanwhile, surged by 43.4 percent to $242 million, up from $169 million in May 2023.
Equity capital placements mostly came from Japan (75 percent), the United States (10 percent) and Hong Kong (7.0 percent).
The funds were mostly channeled to manufacturing (55 percent), real estate (26 percent), and arts, entertainment and recreation (6.0 percent).
Year to date, net equity capital placements ballooned to $1.139 billion from $628 million in the same period last year.
Reinvestments of earnings slightly declined to $407 million from $411 million while net investments in debt instruments recorded an uptick to $2.48 billion from $2.44 billion.
Equity capital placements for the four-month period originated mostly from the United Kingdom (56 percent), Japan (29 percent) and the United States (6.0 percent)
The bulk or 78 percent went to the manufacturing sector, followed by real estate (9 percent), and others (10 percent).
Sought for comment, Security Bank Corp. chief economist Robert Dan Roces said that "factors such as global economic uncertainties, domestic challenges and regional competition may have contributed to this (the May slowdown)."
"The sensitivity of FDI to interest rates, which remain elevated, adds further complexity. Achieving the $9.5-billion FDI target for 2024 will require sustained investor confidence and a favorable economic climate," he added.