Philippines’ FDI down 22.5% as Japan leads capital inflows

Net foreign direct investments (FDI) into the Philippines declined by 22.5 percent year-on-year in the first eight months of 2025, reaching USD 5.2 billion from USD 6.7 billion in the same period last year.

The Bangko Sentral ng Pilipinas (BSP) reported that FDI net inflows for August alone amounted to USD 494 million, down by 40.5 percent from USD 830 million in August 2024.

The central bank said investments from Japan led equity placements during the period, followed by the United States, Singapore, and South Korea.

Capital flowed mainly into manufacturing, wholesale and retail trade, and real estate sectors.

Equity capital, excluding reinvestment of earnings, fell by 35.5 percent to USD 870 million in January–August 2025 from USD 1.3 billion in the same period last year.

Reinvestment of earnings slightly increased by 8.2 percent to USD 916 million from USD 846 million.

Net investments in debt instruments—which comprise intercompany borrowings between foreign investors and local affiliates—declined by 24.4 percent to USD 3.39 billion from USD 4.49 billion.

In August 2025, net equity placements grew by 121 percent to USD 146 million from USD 66 million a year earlier, driven by lower withdrawals of only USD 13 million from USD 37 million.

Reinvested earnings dipped 3.6 percent year-on-year to USD 203 million in August, while debt instruments recorded a steep 73.8 percent drop to USD 145 million from USD 553 million.

The BSP clarified that its FDI data, compiled under the Balance of Payments and International Investment Position Manual, 6th Edition (BPM6), reflect actual investment inflows and differ from investment commitment data published by the Philippine Statistics Authority.

BSP statistics consider equity capital placements where the nonresident investor owns at least 10 percent of the enterprise, as well as reinvested earnings and intercompany borrowings.

Meanwhile, PSA data sourced from investment promotion agencies are based on pledges and may not be fully realized, and they do not include equity withdrawals or follow the 10-percent ownership threshold.

For more information, the public may contact the BSP Department of Economic Statistics via email at bspmail@bsp.gov.ph or telephone at (632) 8708-7227.