Philippine FDI net inflows plunge nearly 40% in October

By Katherine K. Chan, Reporter

Net inflows of foreign direct investments (FDI) into the Philippines plunged nearly 40% year on year in October, as foreigners’ net investments in debt instruments slumped.

Based on preliminary Bangko Sentral ng Pilipinas (BSP) data, FDI net inflows declined by 39.8% to $642 million in October from $1.067 billion in the same month in 2024.

Despite this, October saw the highest monthly FDI level in three months or since the $1.271-billion inflow posted in July.

Month on month, inflows more than doubled (100.6%) from the five-year low of $320 million in September.

“Foreign direct investments into the Philippines posted net inflows of $642 million in October 2025,” the BSP said in a statement released late Monday. “Japan was the top source of FDIs, while corporations engaged in financial and insurance activities were the biggest recipients of FDIs during the month.”

The year-on-year decline came as nonresidents’ net investments in debt instruments plummeted by an annual 50.7% to $437 million from $888 million.

However, this was tempered by higher inflows recorded across other FDI components.

Investments in equity and investment fund shares jumped by 14.5% to $205 million in October 2025 from $179 million in the same month in the previous year.

Nonresidents’ net investments in equity capital, other than the reinvestment of earnings, stood at $117 million in October, up 17.1% from $100 million a year earlier.

Broken down, equity capital placements grew by 10.7% to $135 million from $122 million a year ago, while withdrawals dropped by 17.4% to $19 million from $23 million a year ago.

Meanwhile, reinvestment of earnings rose by 11.3% year on year to $88 million from $79 million a year ago.

TEN-MONTH SLIDE
BSP data also showed that FDI net inflows fell by 24.5% to $6.179 billion as of October from $8.184 billion in the comparable year-ago period.

Nonresidents’ investments in equity and investment fund shares amounted to $2.110 billion in the 10 months to October, 14.5% lower than the $2.468 billion a year earlier.

Investments in equity capital, other than the reinvestment of earnings, slid by 29.8% to $1.022 billion during the period from $1.456 billion the prior year.

This as placements dropped by 16.4% year on year to $1.599 billion from $1.912 billion a year ago. On the other hand, withdrawals climbed 26.5% to $577 million from $456 million a year ago.

Most equity capital placements in the 10-month period came from Japan, the United States and Singapore.

“Industries that received most of these investments were manufacturing, wholesale and retail trade, and real estate,” the central bank said.

Meanwhile, nonresidents’ reinvestment of earnings increased by 7.6% to $1.088 billion from $1.011 billion.

However, net investments in debt instruments dropped by 28.8% to $4.069 billion in the period ending October from $5.717 billion a year ago.

FDIs account for foreign investors’ investments in local businesses where they hold at least a 10% equity capital, as well as investments by a nonresident subsidiary or associate in its resident direct investor. It can be in the form of equity capital, reinvestment of earnings or borrowings.

The BSP’s FDI data covers actual investment flows, compared to the Philippine Statistics Authority’s foreign investments data which include investment commitments that may not be fully realized in a given period.

The BSP expects FDIs to reach a net inflow of $7 billion by end-2025.