Philippines FDI Inflows Drop 62% in February 2025

Foreign direct investment (FDI) net inflows into the Philippines fell sharply to US$529 million in February 2025, marking a 61.9 percent decline from the US$1.4 billion recorded in the same month last year.

The Bangko Sentral ng Pilipinas (BSP) attributed the steep drop primarily to base effects, following a high inflow in February 2024.

Net equity capital investments, excluding reinvested earnings, plunged by 85.9 percent to US$108 million from US$764 million year-on-year.

Debt instrument investments also decreased by 35.4 percent to US$348 million from US$540 million over the same period.

Reinvestment of earnings dipped 13.1 percent to US$73 million, compared to US$84 million in February 2024.

Japan, the United States, Ireland, and Malaysia were the top sources of equity capital during the month.

These foreign investments were mainly directed to the manufacturing, financial and insurance, real estate, and information and communication sectors.

Year-to-date FDI inflows reached US$1.3 billion for January and February 2025, down 45.2 percent from US$2.3 billion in the first two months of 2024.

The BSP compiles FDI statistics based on the IMF’s Balance of Payments and International Investment Position Manual, 6th Edition (BPM6).

Under BPM6, FDI includes equity capital investments of at least 10 percent, reinvested earnings, and intercompany borrowings.

Unlike the Philippine Statistics Authority’s (PSA) approved investment commitments, BSP data reflect actual realized capital inflows.

PSA figures, by contrast, do not consider equity withdrawals or ownership thresholds and may overstate future investment activity.

Despite the FDI slowdown, the Philippine government maintains a medium-term goal of attracting high-value foreign investment in key sectors.

Authorities continue to highlight infrastructure improvements, economic liberalization laws, and digital transition as long-term growth drivers.