​​The Impact of Global Shocks on Real Investment: Evidence from Macroeconomic and Firm-level Data in the Philippines

Hazel Parcon-Santos and Cristeta Bagsic
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Hazel Parcon-Santos: Bangko Sentral ng Pilipinas
Cristeta Bagsic: Geneva Graduate Institute

No 202602, BSP Discussion Paper Series from Bangko Sentral ng Pilipinas

Abstract: This study examines the impact of global shocks on real investment in the Philippines through both macro-level and firm-level analyses, utilizing data-based and text-based indicators of global shocks. At the aggregate level, investment declines in response to US dollar volatility, particularly when the dollar is strengthening, as well as to heightened uncertainty in the US economy and global trade. Firm-level analysis reveals substantial heterogeneity in investment responses to global shocks, with the strongest effects observed in firms most exposed to foreign currency debt and import dependence. Manufacturing firms and exporters of goods experience pronounced sensitivity to dollar volatility, while services exporters, financial firms, and local firms are less vulnerable. The financial channel dominates the response, highlighting that foreign exchange (FX) revenues do not fully insulate firms from global shocks. Text-based uncertainty indicators have modest effects on capital expenditure of firms.

JEL-codes: D31 E22 F31 F44 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2026-02
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Published as BSP Discussion paper No. 2026-02, April 2026

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Persistent link: https://EconPapers.repec.org/RePEc:bhd:dpaper:202602

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