The Philippines bucked the declining trend in foreign direct investments (FDIs) in Southeast Asia where infusions fell 20 percent in the first half of 2020.
The United Nations Conference on Trade and Development in its Global Investment Trends Monitor said FDIs to the Philippines rose 20 percent to $3 billion amid the uncertainties brought by the pandemic. However, the Philippines only got 5 percent of total FDIs to the region of $62 billion.
The Philippines and Thailand were the only countries in Asean which posted increases in FDIs in the region. FDI to Thailand more than doubled to $4.8 billion in the first half.
UNCTAD attributed the increase in these two countries to mergers and acquisitions (M&As) in agriculture and energy which it said played a role in sustaining inflows.
This comes at a time when cross-border M&As in Southeast Asia decreased by 44 percent “because of a significant fall in activity in Singapore.”
UNCTAD said announced greenfield investment dropped by 36 percent with services and manufacturing suffering the most.
The data showed top recipients of FDIs in Southeast Asia reported declines: Singapore, $33 billion (-28 percent); Indonesia, $9.1 billion (-24 percent) and; Vietnam, $6.8 billion (-16 percent)
The report showed global FDI flows were down 49 percent compared to 2019 as lockdowns around the world slowed existing investment projects and the prospects of a deep recession led multination enterprises to re-assess new projects.
The report said prospects for the full year remain in line with earlier projections of a 30 to 40 percent decrease.
“The outlook remains highly uncertain, depending on the duration of the health crisis and on the effectiveness of policy interventions to mitigate the economic effects of the pandemic. Geopolitical risks also continue to add to the uncertainty,” UNCTAD said.