Foreign direct investment (FDI) inflows into the Philippines dropped to US$443 million in January 2026, marking a decline compared with the level recorded in January 2025. The decrease highlights growing caution among foreign investors, with rising geopolitical risks seen as a key factor dampening confidence.
Despite the overall slowdown, Japan remained the largest source of FDI, with most investments flowing into the manufacturing sector, indicating that industrial activity continues to attract foreign capital even amid uncertainty.
Equity capital placements—one of the main components of FDI—were driven primarily by investors from Japan, the United States, and South Korea. These funds were largely directed toward manufacturing, real estate, and wholesale and retail trade, suggesting that while total inflows have weakened, investment interest remains concentrated in core sectors of the economy.
The latest figures underscore a shift in momentum: while the Philippines continues to draw foreign investment, the year-on-year decline signals softer inflows and more cautious global capital, which could affect growth prospects if the trend persists.
