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Manila Bulletin devider Business devider Banking & Finance devider Philippine foreign direct investment inflows plunge in October 2025 on debt drop

Philippine foreign direct investment inflows plunge in October 2025 on debt drop

Published Jan 13, 2026 08:53 am

At A Glance

  • Net inflows of brick-and-mortar foreign direct investments (FDI) in the Philippines plunged to $642 million in October 2025 from $1.07 billion in the same period in 2024, due to the massive drop in net debt instruments.

Net inflows of brick-and-mortar foreign direct investment (FDI) in the Philippines plunged to $642 million in October 2025 from $1.07 billion in the same period in 2024, due to a massive drop in net debt instruments.

The latest preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that FDI inflows fell by 39.8 percent from over $1 billion in October 2024. Month-on-month, however, net FDI inched up from September’s $320 million.

Foreign direct investors slashed the value of loans to their domestic affiliates, net of repayments, by over 50 percent to $437 million during the month, from $888 million a year earlier.

“Japan was the top source of FDIs, while corporations engaged in financial and insurance activities were the biggest recipients of FDIs during the month,” the BSP said in a statement released Monday night, Jan. 12.

Year-to-date, Japan was also the primary source of equity capital placements since January 2025, followed by the United States (US) and Singapore.

Most of these investments went to industries such as manufacturing, wholesale and retail trade, and real estate.

As of end-October 2025, net FDI inflows dropped by a quarter to $6.18 billion from $8.18 billion posted in the same period in 2024. It can be noted that year-to-date inflows have been lower year-on-year since January.

Measured against the Philippines’ FDI target of $10 billion for the year, the end-October total stood at 61.8 percent. Last year’s target was higher than the $9.44 billion in FDIs attracted in 2024.

FDI refers to cross-border investments in which a nonresident investor owns at least 10 percent of the equity in a local enterprise and may take the form of equity capital, reinvested earnings, or intercompany borrowings.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the decline in net inflows was “largely due to the political noise that led to a wait-and-see attitude for some FDIs.”

He added that weather disruptions also weighed on the figures, as fewer working days limited operations at both the government agency compiling the data and the private sector.

For Ricafort, improving governance standards and implementing reforms would boost the confidence of foreign investors in the country, including sentiment toward FDIs.

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