Net foreign direct investments (FDI) markedly dropped in the first quarter, data from the Bangko Sentral ng Pilipinas (BSP) showed on Wednesday.
The January-March total of $1.72 billion, down 17 percent from the year-earlier $2.07 billion.
In March alone, after the war in the Middle East broke out, net FDI inflows dropped 4.23 percent to $611 million from $638 million a month earlier. It was, however, 26.1 percent higher than the year-earlier P485 million.
SM Investment Corp. economist Robert Dan Roces said the weaker FDI figures did not reflect a significant decline in confidence in the Philippines but instead showed that investors are taking a more cautious approach due to global uncertainties.
“FDI can be uneven from month to month, so a few delayed or postponed projects can have a noticeable impact on the data,” he said.
“Moving forward, inflows may gradually pick up if and when financing conditions improve, but competition for investment remains strong, making execution, policy stability and infrastructure delivery increasingly important in turning interest into actual investments.”
Nonresidents’ net investments in debt instruments dropped to $368 million in March from February’s P461 million. It is, however, 14.6 higher than last year’s P321 million.
Reinvestment of earnings rose to $78 million from $61 million a year ago and $75 million in February and equity capital placements also improved to $166 million from $101 million and $102 million a month and year earlier.
To date, equity capital placements rose by 13.1 percent to $337 million from $298 million in January-March 2025 while reinvestments of earnings dropped by 17.9 percent to $206 million from $251 million. Net investments in debt instruments slumped by 22.7 percent to $1.17 billion from $1.52 billion.
The January-March 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 still expects net FDI to hit $7.5 billion this year and 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.
