Foreign direct investments (FDI) into the Philippines posted net inflows of $320 million in September 2025, led by capital from Japan, the Bangko Sentral ng Pilipinas (BSP) said Wednesday.
Data from the BSP showed the September figure marked a 25.93-percent decline from $432 million a year ago. It was also the lowest FDI level since the $314 million recorded in April 2020.
FDI includes investment by a nonresident direct investor in a resident enterprise, where the equity capital in the latter is at least 10 percent. It also includes investment made by a nonresident subsidiary or associate in its resident direct investor. FDIs can be in the form of equity capital, reinvestment of earnings and borrowings.
The decrease was led by a contraction in nonresidents’ net investments in debt instruments, which includes intercompany borrowings between foreign direct investors and their local subsidiaries or affiliates. These investments fell 40.53-percent year-on-year from $338 million to $201 million in September.
Reinvestment of earnings also declined by 2.33 percent to $84 million. Meanwhile, equity capital inflows rose from $7 million to $35 million.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the September slump in FDIs reflected global uncertainty, high borrowing costs and lingering policy gaps.
“With $5.5 billion so far, hitting BSP’s $7.5 billion target will need a strong [fourth quarter] rebound—possible but tough without fresh reforms,” said Ravelas.
Meanwhile, Philippine Institute for Development Studies senior research fellow John Paolo Rivera said the “bigger drag” in FDI inflows come from domestic developments amid the ongoing flood control project controversy. These include the stalled government spending, weaker-than-expected GDP growth, and low investor confidence.
“These created hesitation among foreign firms, especially those assessing long-term projects in manufacturing, infrastructure, and services. The [peso’s] volatility and delays in project approvals also added to the cautious sentiment,” said Rivera.
He said the decline indicates the need for clearer governance signals, more stable policy execution, and stronger economic momentum before investors commit fresh capital.
The manufacturing sector received the largest share of the foreign funds in September.
This brought total FDI net inflows to $5.5 billion from January to September 2025. The nine-month total is equivalent to 1.6 percent of the gross domestic product (GDP) during the same period.
For the first three quarters of 2025, equity capital placements were mainly sourced from Japan, the United States and Singapore.
The industries that attracted the bulk of these investments were manufacturing, wholesale and retail trade and real estate, data from the BSP showed.
FDI data from the BSP track the money that actually flowed in and stayed, while data from the Philippine Statistics Authority refer to planned investment commitments which may not materialize or may be withdrawn.
The Board of Investments earlier reported that its investment approvals fell 48.3 percent in the first 11 months of 2025 to P816.81 billion from P1.58 trillion in the same period last year.
Despite the softer data this year, Department of Trade and Industry (DTI) Secretary and BOI chair Ma. Cristina Roque said the country continues to attract substantial, high-value investments.
The Philippine Economic Zone Authority (PEZA) said it secured P207.577 billion in approved projects from January to November 2025, up from P201 billion it registered in the same period last year.
