FDI net inflows fall to $642 million

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January 14, 2026 | 12:00am

MANILA, Philippines — Foreign direct investments (FDI) inflow to the Philippines plunged by nearly 40 percent year-on-year in October, although the month saw a rebound from September’s five-year low as investors remained largely cautious amid political and policy uncertainties.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed net FDI inflow fell by 39.8 percent to $642 million in October 2025 from $1.07 billion in the same month in 2024.

Despite the sharp decline, October posted the highest monthly inflow in three months or since the $1.27-billion level recorded in July 2025. On a month-on-month basis, inflows more than doubled, rising by 100.6 percent from the five-year low of $320 million in September.

“Foreign direct investments into the Philippines posted net inflows of $642 million in October 2025,” the BSP said. “Japan was the top source of FDIs, while corporations engaged in financial and insurance activities were the biggest recipients of FDIs during the month.”

The year-on-year drop was largely driven by a steep fall in nonresidents’ net investments in debt instruments, which plunged by 50.7 percent to $437 million from $888 million a year earlier. This was partly offset by stronger inflows in other FDI components.

Investments in equity and investment fund shares climbed by 14.5 percent to $205 million in October from $179 million in the same month in 2024.

Nonresidents’ net investments in equity capital, excluding reinvestment of earnings, rose by 17.1 percent to $117 million from $100 million a year ago. Equity capital placements increased by 10.7 percent to $135 million, while withdrawals declined by 17.4 percent to $19 million.

Reinvestment of earnings likewise went up by 11.3 percent to $88 million from $79 million.

For the 10-month period ending October 2025, however, BSP data showed overall FDI net inflow fell by 24.5 percent to $6.18 billion from $8.18 billion in the same period in 2024.

Nonresidents’ investments in equity and investment fund shares slipped by 14.5 percent to $2.11 billion from $2.47 billion. Investments in equity capital, excluding reinvestment of earnings, dropped by 29.8 percent to $1.02 billion from $1.46 billion.

Most equity capital placements during the 10-month period came from Japan, the United States and Singapore.

“Industries that received most of these investments were manufacturing, wholesale and retail trade and real estate,” the central bank said.

HSBC ASEAN economist Aris Dacanay said the recent weakness in FDI reflects a “wait-and-see environment” among foreign investors amid political noise and questions over policy direction.

“It’s a wait-and-see environment. I do see that the FDI of export-oriented industries will continue to find its way in the Philippines,” Dacanay said, noting that the country still enjoys a tariff advantage over China. “So you still have that export base that is resilient amidst the political headwinds.”

He added, however, that investments tied more closely to domestic consumption could face some drag.

“Those that are more consumer-oriented or those that import for the Philippine consumers, I think there will be some drag,” he said, although he stressed that private consumption is still expected to grow by more than four percent.

Dacanay said the Philippines remains attractive over the medium term due to its demographics and role in global supply chains.

“The Philippines still has the strongest demography,” he said. “We still have the tariff advantage. We still have a comparative advantage when it comes to services. We’re still part of the AI (artificial intelligence) supply chain.”

He added that inflows would likely be concentrated in specific industries, “particularly those export-oriented.”