NET foreign direct investments (FDI) markedly dropped in the first six months of the year due to global uncertainties, data from the Bangko Sentral ng Pilipinas (BSP) showed on Thursday.
Inflows in the January to June period totaled $3.38 billion, down 17.8 percent from the year-earlier $4.12 billion.
In June alone, net FDI inflows dropped to $447 million from the $638 million a month earlier. It is, however, higher than last year’s $331 million.
Union Bank chief economist Ruben Carlo Asuncion said the decline was “not entirely surprising given the challenging global investment environment.”
“The decline was driven mainly by lower intercompany borrowings and reinvested earnings, while equity capital investments continued to increase,” Asuncion said.
“This suggests that foreign investors remain willing to commit long-term capital to the Philippines despite near-term external uncertainties,” he added.
To date, equity capital placements rose by 59.4 percent to $489 million from $307 million in January-June 2025 while reinvestments of earnings dropped by 19.4 percent to $829 million from $1.03 billion.
Net investments in debt instruments also slumped by 25.8 percent to $2.06 billion from $2.78 billion.
In June alone, nonresidents’ net investments in debt instruments dropped to $369 million in June from May’s P462 million. It is, however, 24.2 higher than last year’s P297 million.
Reinvestment of earnings also rose to $130 million from $91 million and $99 million a year and month earlier, respectively.
Equity capital placements, however, turned negative in June to $52 million from $77 million a month earlier but was 8.9 percent higher than last year’s $57-million contraction.
The January-June 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.
“Looking ahead, FDI prospects will likely depend on global economic conditions, trade and geopolitical developments, and investor confidence,” Asuncion said.
“Although the continued rise in equity investments suggests that foreign investors remain interested in long-term opportunities in the Philippines,” he added.
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.
