The country’s foreign direct investment (FDI) posted net inflows of US$498 million in March 2025, a 27.8 percent drop from the US$689 million posted a year earlier, according to data released by the Bangko Sentral ng Pilipinas (BSP). The BSP attributed the decline to reduced investor activity across all major FDI components, underscoring the indicator’s role as a barometer of investor confidence and economic health.
Net inflows of debt instruments, comprising intercompany loans between foreign investors and their local affiliates, plunged by 31.6 percent to US$329 million. Meanwhile, net equity capital investments (excluding reinvested earnings) fell by 27.4 percent to US$102 million, and reinvestments of earnings dipped slightly by 1.2 percent to US$66 million.
Despite the overall decline, equity capital placements continued to flow primarily from Singapore, Japan, the United States, South Korea, and Malaysia, targeting strategic sectors such as real estate, manufacturing, finance and insurance, and administrative support services.
For the first quarter of 2025, cumulative FDI net inflows dropped by 41.1 percent year-on-year, reaching US$1.8 billion, down from US$3.0 billion in 1Q 2024.
The BSP noted that the subdued FDI performance reflects persistent global uncertainties and investment caution, which may influence the central bank’s stance on macroeconomic policy. A sustained FDI slowdown could signal the need for enhanced investment promotion and structural reforms to sustain long-term growth amid tighter global financial conditions.
