FDI inflow shrinks 28% in March

MANILA, Philippines — Foreign direct investment (FDI) inflows into the Philippines dropped for the fifth consecutive month in March, reflecting sustained investor caution amid global and domestic economic uncertainties.

Data released by the Bangko Sentral ng Pilipinas (BSP) yesterday showed that net FDI inflows reached $498 million in March, a 27.8-percent decline from the $689 million posted in the same month last year.

This was the lowest monthly inflow since the $110 million in December 2024.

The March figure brought the first-quarter FDI tally to $1.76 billion, 41.1 percent lower than the $3 billion recorded in the first three months last year.

The BSP attributed the slump to reduced investor appetite across all major FDI components.

In particular, net investments in debt instruments, which account for intercompany borrowings between foreign investors and their Philippine subsidiaries, fell sharply by 31.6 percent to $329 million in March from $481 million in the same month last year.

Equity capital, excluding reinvested earnings, also shrank by 27.4 percent to $102 million from $141 million. Meanwhile, reinvestment of earnings dipped slightly by 1.2 percent to $66 million from $67 million.

Placements went down by 5.5 percent to $148 million, while withdrawals skyrocketed by 185.1 percent to $46 million in March.

Major equity capital infusions in March came from Singapore, Japan, the United States, South Korea and Malaysia, with the bulk of investments going into the real estate, manufacturing, financial and insurance as well as administrative support sectors.

For the first quarter, equity other than reinvested earnings plunged by 66.7 percent to $298 million from $894 million in the same period last year, while net investments in debt instruments dropped 35.3 percent to $1.2 billion.

Only reinvested earnings registered a modest 8.8 percent uptick to $264 million.

The central bank said that its FDI statistics reflect actual investment inflows, unlike the investment commitments tracked by the Philippine Statistics Authority, which are based on approvals by investment promotion agencies and do not necessarily translate into realized flows.

The BSP expects FDI net inflows at $9 billion this year and in 2026.