Disbursement of foreign direct investment in March reached US$1.39 billion, the highest level since the beginning of the year, according to the Foreign Investment Agency (FIA) of the Ministry of Planning and Investment.

The latest amount brought disbursements during the first quarter to a total of $2.54 billion, an increase of 1.6 per cent over the same period of the last year and 22.1 per cent of the target set for all of this year, the FIA said.

The first three months, however, have witnessed a slump in newly registered investment. During the period, the nation attracted $2.37 billion in foreign direct investment (FDI), down 33 per cent year-on-year. Only 173 new foreign-invested projects were licensed during the period, worth just over $2 billion in total, a decrease of 35 per cent in capital and 40 per cent in the number of projects from the first quarter of last year.

However, in one bright spot, 23 projects were approved to increase their registered capital by a combined $248 million, compared to just $5 million worth of capital increase in January and $81 million in February.

Among major new projects registered during the quarter were a $1 billion Singapore-invested project to produce solar panels, a $266 million power plant project, and a $174 million tourism and shopping complex.

With the large project, Singapore became the leading source of foreign investment during the quarter, accounting for 46.7 per cent of total registered capital.

Hong Kong ranked second with $331.5 million, followed by the British Virgin Islands with $277.4 million, and South Korea with $193 million.

During the period, $1.55 billion or 65 per cent of the total registered capital flowed into the processing and manufacturing sectors, making them the most attractive sectors in the eyes of foreign investors. Construction and retail also proved their attraction, gobbling up $206 million and $50 million, respectively.

The southern economic hub of HCM City was the top destination for foreign investment, absorbing $1.1 billion, followed by the central city of Da Nang with $364.7 million and the central province of Binh Thuan with $266 million.

The foreign-invested sector saw an estimated three-month export turnover of $8.9 billion, up 31.3 per cent year-on-year, and accounting for 46.2 per cent of the country’s total export turnover. The sector also posted an export surplus of $969 million.

Source: VNS