NET foreign direct investments (FDI) further dropped in May, data from the Bangko Sentral ng Pilipinas (BSP) showed on Monday, hitting an over 11-year low as investors remain cautious amid heightened geopolitical tensions.
Net FDI for the month totaled $210 million, down 64.7 percent from the year-earlier $595 million and the lowest since March 2015’s $200.4 million.
Year to date, net inflows have fallen by 33.4 percent to $2.18 billion from $3.27 billion in the comparable 2025 period. Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the decline reflected heightened investor caution worldwide.
“Investors remain cautious amid heightened geopolitical tensions, trade uncertainties, and volatile financial markets, leading many firms to delay or scale back investment decisions,” he said.
“Domestically, while the Philippines continues to post respectable growth, investors are looking for clearer signals on policy execution, infrastructure rollout, power costs, and the overall ease of doing business.”
Ravelas said the decline appeared to be driven more by investor caution than a loss of confidence in the Philippines.
He said investors were becoming more selective rather than leaving the country given its strong consumer market, favorable demographics and ongoing economic reforms.
“Looking ahead, FDI flows are likely to remain uneven in the near term as global uncertainty persists,” Ravelas said.
“However, as interest rates continue to ease globally and supply chain diversification trends continue, the Philippines remains well-positioned to attract investments in manufacturing, logistics, digital infrastructure, renewable energy, and services.”
The BSP data showed that net investments in debt instruments plunged by 92.1 percent to $35 million in May from $440 million a year earlier. It was also lower than April’s $44 million.
Reinvestment of earnings rose to $98 million from $93 million a year ago and $80 million in April, while equity capital placements rose to $77 million from $62 million a year earlier but fell from $127 million in May.
To date, equity capital placements were up 48.7 percent to $541 million from $364 million, reinvestments of earnings dropped by 9.7 percent to $383 million from $424 million and net investments in debt instruments slumped by 49.5 percent to $1.25 billion from $2.48 billion.
The January-May placements originated mostly from Japan, the United States and Singapore, the BSP said, with the manufacturing, financial and insurance, and real estate industries the top recipients.
The central bank expects net FDI to hit $7.0 billion this year and $8.0 billion in 2027.
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.
