Foreign direct investment (FDI) inflows to the Philippines reached US$1.3 billion in July 2025, supported by fresh capital from Japan and the United States.

Long-term foreign investments remain strong

In a statement on Friday, the Bangko Sentral ng Pilipinas (BSP) reported that the figure was 7.5 percent lower than the $1.4 billion posted a year earlier. Long-term foreign investments, however, remain strong, particularly in wholesale and retail trade, manufacturing and real estate, the BSP said.

The decline was mainly due to a 39.4 percent drop in net investments in debt instruments, or intercompany loans between foreign investors and local subsidiaries, which fell to $711 million from $1.2 billion in 2024.

Surge in equity capital placements

This was partly offset by a 450.6 percent surge in equity capital placements to $418 million and a 14.3 percent rise in reinvested earnings to $139 million. “Equity capital placements in July were sourced primarily from Japan and the United States,” the BSP said, citing sustained investor confidence in the country’s medium-term outlook.

From January to July 2025, total FDI net inflows reached $4.7 billion, 20 percent lower than the $5.9 billion recorded in the same period last year.

Equity capital

FDI represents long-term capital invested by nonresidents through ownership stakes, reinvested profits, or intercompany loans. The BSP classifies these as equity capital, reinvested earnings, and debt instruments. Higher inflows typically signal investor confidence and contribute to job creation and productivity, while slower inflows may reflect global uncertainty or domestic governance risks.

The BSP also clarified that its data reflect actual inflows, unlike Philippine Statistics Authority figures, which track investment pledges from Investment Promotion Agencies that may or may not materialize.