FDI inflows plunge 19.2% to $4.8 billion in first eight months of 2026
Philippine foreign direct investment (FDI) net inflows fell 19.2 percent year-on-year to $4.8 billion in the first eight months of 2026, as lower intercompany borrowings by foreign investors pulled down investments in the country.
Data from the Bangko Sentral ng Pilipinas (BSP) showed FDI net inflows reached $4.768 billion from January to August, down from $5.902 billion in the same period last year. The BSP said the decline was driven mainly by net investments in debt instruments, which fell 30 percent to $2.565 billion from $3.661 billion a year earlier, as foreign direct investors reduced their net intercompany borrowings.
Equity investments, meanwhile, were nearly unchanged at $2.203 billion from $2.241 billion in the same period last year.
Equity capital placements, excluding reinvested earnings, reached $870 million, almost flat from $871 million a year earlier. Reinvestment of earnings also edged down to $1.333 billion from $1.370 billion.
The BSP said equity placements came mainly from Japan, the United States and Singapore, with investments directed largely to the manufacturing, financial and insurance, and real estate industries.
For August alone, FDI net inflows reached $690 million, up from $552 million in August 2025. Net equity investments rose to $554 million from $389 million a year earlier, while net investments in debt instruments declined to $136 million from $164 million.
Foreign investments have been on a downward trend since last year, which economists have attributed to weak investor sentiment amid governance issues surrounding the flood control infrastructure scandal.
The latest FDI figures came after the release of third-quarter gross domestic product (GDP) data on Monday, which showed growth slumping to 2.1 percent for a fifth consecutive quarter. The slowdown likewise began after President Ferdinand R. Marcos Jr. flagged a nationwide kickback scheme involving anomalous flood control projects in July last year.
On Monday, Economy, Planning and Development Secretary Arsenio Balisacan acknowledged that persistent confidence issues stemming from the ‘floodgate’ scandal continued to weigh on economic growth, adding that the broader investment slump had also affected foreign investments.
“Indeed, the slowdown in investment is a drag,” he said.
“We need to diversify the economy, and investment is one of those drivers, along with exports, so that we don't become just so dependent on household consumption for growth. And so, FDIs are crucial to that, because there's only so much that you can get from our domestic investments,” he added.
The government has begun implementing and working on several measures to attract more foreign investors, including adopting international taxation standards and incentives and coordinating with other countries on new double taxation agreements.
It has also renewed efforts to capture a larger share of the global technology race, with the Luzon Economic Corridor and the Philippines’ participation in the US-led Pax Silica initiative aimed at attracting more foreign technology investments.
Balisacan highlighted the importance of FDI, saying these investments often bring technological innovation and positive spillover effects across the economy.
“The good thing about FDIs also is that, apart from the physical addition that it brings to the capital stock, they also bring in technologies and innovations and management. And so, they create externalities for the broader economy,” he said.
“Therefore, our push for getting FDIs in the country is crucial in modernizing our industries and expanding our productive capacities for future growth, future and sustained growth.”
The BSP's FDI figures measure actual cross-border investment transactions. They differ from the approved foreign investment figures released by the Philippine Statistics Authority, which represent investment commitments that may not be fully realized during the reporting period.