Foreign direct investment (FDI) inflows to the Philippines totaled US$1.3 billion in July 2025, supported mainly by fresh capital from Japan and the United States, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
This figure represents a 7.5 percent decline from the US$1.4 billion recorded in the same month last year.
Despite the overall decrease, long-term foreign investments remain robust, particularly in sectors such as wholesale and retail trade, manufacturing, and real estate.
The decline was primarily driven by a 39.4 percent drop in net investments in debt instruments—intercompany loans between foreign investors and their local subsidiaries—which fell to US$711 million from US$1.2 billion the previous year. This was partly offset by a significant 450.6 percent surge in equity capital placements, which rose to US$418 million, and a 14.3 percent increase in reinvested earnings, which climbed to US$139 million.
“Equity capital placements in July 2025 were sourced primarily from Japan and the United States,” the BSP said, noting sustained investor confidence in the country’s medium-term outlook.
From January to July 2025, total FDI net inflows amounted to US$4.7 billion, marking a 20 percent decrease compared to US$5.9 billion during the same period in 2024.
FDI refers to long-term capital invested by foreigners through ownership stakes, reinvested profits, or intercompany loans. The BSP classifies these investments into equity capital, reinvested earnings, and debt instruments. Generally, higher FDI inflows indicate growing investor confidence and contribute positively to job creation and productivity, while slower inflows may reflect global uncertainties or domestic governance challenges.
The BSP also clarified that its FDI data reflect actual inflows, contrasting with Philippine Statistics Authority (PSA) figures that track investment pledges from Investment Promotion Agencies (IPAs), which may not always materialize.