INVESTORS are becoming more cautious amid global and local uncertainties, with the country’s foreign direct investments dropping by more than 19 percent in the first eight months of the year.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that inflows totalled $4.8 billion, down 19.2 percent from $5.9 billion recorded during the same period last year.
In a statement, the central bank said the decline was driven mainly by lower net investments in debt instruments.
“This reflected lower net intercompany borrowings from foreign direct investors during the period,” it added.
In July alone, net FDI inflows were recorded at $690 million, up 24.9 percent from the $552 million a year earlier. It is also slightly higher than the previous month’s $689 million.
This is the highest inflow recorded this year since January 2026’s $800 million.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the numbers show that investors are still willing to commit capital to the Philippines.
“The challenge now is converting interest into sustained long-term investments by improving competitiveness, reducing business costs, and accelerating reforms,” Ravelas said.
“In a world competing aggressively for capital, standing still is not an option,” he added.
To date, equity capital placements slightly declined by $870 million from $871 million a year earlier, while reinvestments of earnings dropped by 2.7 percent to $1.33 billion from $1.37 billion.
Net investments in debt instruments slumped by 30 percent to $2.57 billion from $3.66 billion.
In July alone, non-residents’ net investments in debt instruments dropped to $136 million from July’s $365 million and August 2025’s $164 million.
Reinvestment of earnings, meanwhile, rose to $365 million, up 50.2 percent from $243 million in August 2025. It is also higher than the $138 million recorded a month earlier.
Equity capital placements also increased by 29.5 percent to $189 million from $146 million a year earlier. It is also higher than the $186 million recorded a month ago.
The January-August placements originated mostly from Japan, the United States, and Singapore, the BSP said, with the top recipient sectors being manufacturing, financial and insurance, and real estate industries.
The central bank expects net FDI to hit $6.5 billion and $7.0 billion this year and next year.
The BSP’s FDI figures differ from those of other government agencies in that these cover actual investments. The Philippine Statistics Authority, in contrast, publishes approved foreign investments — commitments that may not be realized.
