NET foreign direct investments (FDI) recovered in October after a two-month decline but were markedly lower compared to a year earlier, data from the Bangko Sentral ng Pilipinas (BSP) showed late Monday.
Inflows for the month totaled $642 million, up 100.6 percent from the month-earlier $320 million and the highest since July’s 1.3 billion. It was, however, well below the $1.07 billion posted in October 2024.
Year to date, net FDI inflows dropped 24.5 percent to $6.2 billion from $8.2 billion. Cumulative inflows have fallen since the start of 2025, attributed to heightened uncertainties.
The BSP data showed that nonresidents’ net investments in debt instruments rose to $437 million in October from $201 million a month earlier. It dropped, however, from $888 million a year ago.
Reinvestment of earnings also increased, to $117 million from $100 million a year ago and $35 million in September, and equity capital placements also rose to $88 million from $79 million and $84 million a year and a month earlier.
Philippine Institute for Development Studies senior fellow John Paolo Rivera said the year-to-date decline was driven by global uncertainty, tighter financial conditions earlier in the year and weaker investor confidence due to governance and execution concerns in the country.
“Some large base effects from last year’s one-off investments also magnified the decline,” he added.
The month-on-month rebound, meanwhile, was said to reflect uneven timing of investments as previously delayed project tranches, reinvested earnings and short-term capital injections came in.
“However, this bounce should be seen as partial normalization rather than a clear turnaround, with sustained recovery hinging on clearer policy signals, improved project execution, and restored investor confidence,” Rivera said.
Year to date, equity capital placements plunged by 29.8 percent to $1.02 billion from $1.5 billion in January-October 2024 while reinvestments of earnings rose 7.6 percent to $1.09 billion from $1.01 billion. Net investments in debt instruments slumped by 28.8 percent to $4.07 billion from $5.72 billion.
The January-October placements originated mostly from Japan, the United States and Singapore, the BSP said, with the top recipient sectors being manufacturing, wholesale and retail trade and real estate.
The central bank expects net FDI to have hit $7.0 billion in 2025, down from $9.4 billion in 2024, and rebound to $7.5 billion this year. Both were lowered from the previous projections of $7.5 billion and $8.0 billion, respectively.
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.
