FDI in first two months of 2025 drop 45%
Net inflows of brick-and-mortar foreign direct investment (FDI) into the Philippines amounted to $529 million in February, marking a steep 61.9-percent decline from the $1.4 billion recorded in the same month last year, the Bangko Sentral ng Pilipinas (BSP) reported.
FDI net inflows last February were also below January’s $731 million, which had shrunk by a fifth year-on-year.
In a statement on Monday, May 12, the BSP mainly attributed the sharp year-on-year drop in job-generating February FDI to base effects and a significant contraction in equity capital investments.
Net investments in equity capital (excluding reinvestment of earnings) by nonresidents plunged by 85.9 percent to $108 million, compared to $764 million in February 2024.
Other components of FDI also fell. Investments in debt instruments dropped 35.4 percent to $348 million from $540 million a year ago, while reinvestment of earnings decreased by 13.1 percent to $73 million from $84 million.
Despite the overall decline, the BSP noted that the majority of equity capital placements in February originated from Japan (56 percent of total), the United States (11 percent), Ireland (10 percent), and Malaysia (five percent).
These funds were primarily funneled into the manufacturing (62 percent of total), financial and insurance (11 percent), real estate (also 11 percent), as well as information and communication sectors (10 percent).
For the first two months of 2025, total FDI net inflows reached $1.3 billion, down 45.2 percent from the $2.3 billion posted in the same period last year.
The top country sources of FDI as of end-February were Japan (53 percent of total), the US (16 percent), Singapore (eight percent), as well as Malaysia and Ireland (six percent each).
The top recipient industries during the two-month period were manufacturing (56 percent of total), financial and insurance (15 percent), real estate (14 percent), as well as information and communication (six percent).
The Philippines is eyeing to attract $10 billion in FDI this year, higher than last year’s $8.93 billion.
The BSP defines FDI as referring to cross-border investments where a nonresident investor owns at least 10-percent equity in a local enterprise, and may take the form of equity capital, reinvested earnings, or intercompany borrowings.
