Foreign direct investments (FDI) continue to provide critical supplementary capital that the Philippines cannot generate domestically, despite a slowdown in inflows, according to the Bangko Sentral ng Pilipinas (BSP).
Latest BSP data show net FDI inflows declined by 17.8 percent to US$376 million in June 2025, from US$457 million in June 2024. The drop was driven by a shift in nonresidents’ equity capital investments, which reversed from US$85 million in inflows to US$57 million in outflows.
However, the decline was partially offset by a 36.7 percent increase in reinvested earnings, which rose to US$128 million, and a 9.3 percent rise in debt instrument investments, reaching US$305 million. These forms of FDI — particularly reinvested earnings and intercompany borrowings — remain essential channels of external capital.
Japan led equity capital placements in June, followed by the United States and South Korea. The key recipient sectors were manufacturing, real estate, and wholesale and retail trade, highlighting continued investor interest in productive and consumer-linked industries.
For the first half of 2025, net FDI inflows fell 23.8 percent to US$3.4 billion from US$4.5 billion in the same period last year, reflecting persistent global uncertainty and investor caution.
The BSP emphasized that while values have declined, the nature of FDI — as actual, long-term investments that include equity, earnings reinvestment, and intra-firm lending — makes it a vital conduit for capital and development, beyond what the domestic economy can mobilize on its own.
