The Philippines saw a 4.4 percent increase in net foreign direct investment (FDI) inflows in the first 11 months of 2024, reaching $8.6 billion compared to the same period in 2023, as most investors parked funds in debt instruments.

The Bangko Sentral ng Pilipinas (BSP) reported Monday that November FDI contributed $901 million, lower than the $1.1 billion recorded in November 2023.

he BSP said the decline in November reflected lower investments in debt instruments by nearly 18 percent to $791 million compared to $964 million in the same month last year.

Foreigners' net investments in equity capital excluding reinvestment of earnings decreased faster by nearly 60 percent to $35 million from $85 million.

Japan accounted for 49 percent of total FDI, followed by the United States (24 percent) and Singapore (17 percent). The manufacturing sector received the largest share at 49 percent, followed by real estate (25 percent) and financial and insurance (9 percent).

From January to November 2024, debt instruments accounted for nearly $6 billion of the $8.6 billion in total FDI net inflows.

Jonathan Ravelas, financial market analyst and senior adviser at Reyes Tacandong & Co., said FDI was tempered by elevated global inflation rates.

or example, the United States' inflation grew by 0.3 percentage points to 2.7 percent last November, higher than the levels four months prior.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said investors also diversified their placements due to an upbeat U.S. economic outlook following Donald Trump’s second presidential victory. Market analysts anticipate higher corporate earnings in the U.S., as Trump has pledged lower corporate taxes to boost production.

Ricafort expects Philippine FDI inflows to remain strong as the BSP adjusts its lending rates to stimulate household consumption. He also noted that the recently enacted Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act will encourage investment expansion in the country.

The law reduces corporate income tax from 25 percent to 20 percent for registered business enterprises and doubles power expense deductions for manufacturing firms, from 50 percent to 100 percent.