Net inflows of foreign direct investments (FDI) into the Philippines dropped 40.5 percent year-on-year to $494 million in August on lower net investments in debt instruments, the Bangko Sentral ng Pilipinas (BSP) said Monday.
The August figure marks a significant decline from the $830 million recorded in August 2024 and the $1.3 billion registered in July 2025, according to the BSP.
The decrease was led by a 73.8-percent fall in nonresidents’ net investments in debt instruments, which includes intercompany borrowings between foreign direct investors and their subsidiaries or affiliates in the Philippines. These investments fell to $145 million in August from $553 million a year earlier.
Equity capital inflows showed strength, rising 121 percent year-on-year to $146 million in August from $66 million a year ago. Reinvestment of earnings saw a 3.6-percent year-on-year drop from $210 million to $203 million.
Despite the monthly fall, the BSP said net FDI inflows remained positive in August 2025, with manufacturing and Japan-sourced funds leading the way.
Data showed that total net FDI inflows amounted to $5.2 billion in the first eight months of 2025, reflecting a 22.5-percent decline from $6.7 billion recorded in the same period in 2024.
Economists pointed to a challenging global and domestic environment as reasons for the slump.
Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, said the BSP cited weaker global trade, geopolitical uncertainties, and higher US tariffs for the FDI downturn, which dampened investor sentiment.
Asuncion said logistical inefficiencies and policy execution gaps continued to weigh on investor confidence. While the BSP maintains its $7.5-billion full-year FDI projection, analysts caution that a sustained recovery hinges on stronger policy support and clearer investment signals.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), also attributed the decline to global factors like higher US tariffs, trade wars and protectionist policies.
He said local political noise, along with weather-related disruptions from a series of typhoons, could have also negatively affected market and investor sentiment in July and August 2025.
