MANILA, Philippines — Foreign direct investments (FDI) in the Philippines declined sharply in February as the Bangko Sentral ng Pilipinas (BSP) registered net inflows of $529 million, the lowest in two months or since the $110 million posted in December.
The February figure marked a steep 61.9 percent drop from the $1.39 billion in net inflows seen in the same month in 2024, largely due to base effects from the previous year’s high.
It was also 38.2 percent lower than the $731 million net inflows recorded in January.
“The decline in FDI net inflows reflected the 85.9 percent contraction in nonresidents’ net investments in equity capital (other than reinvestment of earnings),” the central bank said in a statement.
FDI inflows represent long-term investments by foreign firms in the local economy, often seen as a vote of confidence in a country’s growth prospects.
Lower inflows may reflect investor caution or a high base from the previous year, but the BSP said these are still crucial in supporting job creation and economic expansion in the Philippines.
The BSP expects FDI net inflows at $9 billion in the next two years.
Investments in equity capital other than reinvestment of earnings dropped to $108 million in February from $764 million a year ago. Equity placements slumped by 82.9 percent to $146 million, while withdrawals declined by 58.3 percent to $39 million.
The bulk of the equity capital placements came from Japan, the United States, Ireland and Malaysia. These investments were channeled mainly to manufacturing, financial and insurance, real estate as well as information and communication.
Investments in debt instruments, consisting mainly of inter-company borrowings between foreign direct investors and their subsidiaries or affiliates in the Philippines, plunged by 35.4 percent to $348 million from $540 million a year ago.
Likewise, non-residents’ reinvestment of earnings declined by 13.1 percent to $73 million in February from $84 million in the same month in 2024.
In the first two months of the year, net FDI inflow fell by 45.2 percent to $1.26 billion from a year-ago level of $2.3 billion.
The net investments of debt instruments declined by 36.8 percent to $867 million from January to February compared to $1.37 billion in the same period last year.
Equity placements from Japan, the US, Singapore, Malaysia and Ireland fell by 74 percent to $249 million from $956 million, while withdrawals dropped by 73.9 percent to $53 million from $203 million.
