Philippine FDI inflows plunge 33.4% through May
MANILA — Foreign direct investment net inflows into the Philippines fell 33.4% to USD 2.18 billion from January to May 2026, compared with USD 3.27 billion during the same period last year, preliminary Bangko Sentral ng Pilipinas data showed.
The decline matters because sustained FDI can provide businesses with long-term capital for expansion, technology and productive capacity, while weaker inflows may signal greater investor caution and constrain potential job creation.
The BSP attributed the five-month contraction to lower net investments in debt instruments and reduced reinvestment of earnings, which outweighed stronger net equity capital investments.
Net investments in debt instruments, consisting mainly of intercompany borrowing and lending between foreign investors and their Philippine affiliates, plunged 49.5% to USD 1.25 billion from USD 2.48 billion.
The decline reflected lower intercompany borrowings from foreign direct investors during the period.
Reinvestment of earnings fell 9.7% to USD 383 million from USD 424 million as foreign-owned companies retained less income for reinvestment.
Net equity capital investments excluding reinvested earnings, however, rose 48.7% to USD 541 million from USD 364 million.
Gross equity capital placements edged down to USD 613 million from USD 617 million, but withdrawals dropped sharply to USD 72 million from USD 253 million.
Total equity and investment fund shares, including reinvested earnings, increased to USD 925 million from USD 788 million.
Japan, the United States and Singapore were the primary sources of equity capital placements during the first five months.
The investments were directed mainly toward manufacturing, financial and insurance activities, and real estate.
FDI net inflows declined in four of the first five months of 2026 on a year-on-year basis.
January inflows fell 35.7% to USD 469 million from USD 729 million, while February inflows dropped 25.4% to USD 638 million from USD 855 million.
March inflows increased 26.1% to USD 611 million from USD 485 million, the only year-on-year expansion during the five-month period.
Inflows then sank 58.8% to USD 250 million in April from USD 607 million before declining further in May.
For May alone, FDI net inflows plunged 64.7% to USD 210 million from USD 595 million a year earlier.
Net debt instrument investments collapsed 92.1% to USD 35 million in May from USD 440 million in the same month last year.
May reinvestment of earnings increased 5.7% to USD 98 million from USD 93 million.
Net equity capital investments climbed 24.5% to USD 77 million from USD 62 million.
Gross equity placements reached USD 87 million in May, down from USD 108 million a year earlier, while withdrawals fell to USD 10 million from USD 46 million.
The BSP’s historical data showed annual FDI net inflows declining from USD 11.98 billion in 2021 to USD 9.49 billion in 2022 and USD 8.93 billion in 2023.
Inflows recovered to USD 9.40 billion in 2024 before falling 17.1% to USD 7.79 billion in 2025.
Net debt instrument investments accounted for USD 7.51 billion of the 2021 total, USD 6.25 billion in 2022, USD 6.53 billion in 2023, USD 7.22 billion in 2024 and USD 5.27 billion in 2025.
Reinvested earnings amounted to USD 1.10 billion in 2021, USD 1.29 billion in 2022, USD 1.31 billion in 2023, USD 1.17 billion in 2024 and USD 1.20 billion in 2025.
Net equity investments excluding reinvested earnings reached USD 3.38 billion in 2021, USD 1.96 billion in 2022, USD 1.08 billion in 2023, USD 1.01 billion in 2024 and USD 1.32 billion in 2025.
The BSP compiles FDI statistics under the International Monetary Fund’s Balance of Payments and International Investment Position Manual, Sixth Edition.
Under the framework, FDI includes an investment by a nonresident in a Philippine enterprise in which the investor owns at least 10% of the equity.
It may take the form of equity capital, reinvested earnings or borrowings between foreign investors and their local subsidiaries or affiliates.
The BSP said its figures measure actual net investment inflows and differ from Philippine Statistics Authority data on approved foreign investments.
PSA figures are investment commitments reported by investment promotion agencies and may not be fully realized within the period in which they were approved.
The PSA data also do not apply the 10% foreign ownership threshold used by the BSP or deduct equity withdrawals from reported investments.
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