Foreign investment approvals soar 52%

MANILA, Philippines — Foreign investment pledges approved by investment promotion agencies (IPAs) surged by 52 percent year-on-year in the first quarter, signaling investor confidence, but total investments, including those made by Filipino firms, declined over the same period.

Data released by the Philippine Statistics Authority (PSA) yesterday showed that foreign investments approved in the first quarter amounted to P42.64 billion, higher than the P27.99 billion recorded in the same period last year.

These investments were approved by IPAs such as the Bases Conversion and Development Authority, Board of Investments, Clark Development Corp., Cagayan Economic Zone Authority, Clark International Airport Corp., Philippine Economic Zone Authority and the Subic Bay Metropolitan Authority.

South Korea was the leading source of foreign investments, contributing P25.37 billion or 59.5 percent of the total in the first quarter.

This was followed by Singapore with P3.18 billion (7.5 percent) and China with P2.54 billion (5.9 percent).

By industry, arts, entertainment and recreation had the largest share, accounting for P10.38 billion, or 24.4 percent, of total foreign investment approvals in the first quarter.

Manufacturing ranked second with P9.08 billion (21.30 percent), followed by accommodation and food service activities with P9.07 billion (21.28 percent).

In terms of location, Central Luzon received the highest share of foreign investment pledges, amounting to P33.08 billion or 77.6 percent of the total in the first quarter.

Calabarzon (Cavite-Laguna-Batangas-Rizal-Quezon) came next with P3 billion (seven percent), followed by the National Capital Region with P2.13 billion (five percent).

Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email that the continued entry of foreign investments to the Philippines shows international investor confidence on the country, amid its favorable demographics.

He said that the Philippines offers a large market for foreign investors,, given its population of over 114 million Filipinos, with an average age below 25.

Reforms, including the CREATE MORE Act, which enhanced the tax incentives regime, also helped attract foreign investments into the country.

“CREATE MORE made it more appealing for FDIs (foreign direct investments) to locate in the country…narrowing the gap on FDI incentives with neighboring ASEAN (Association of Southeast Asian Nations) countries,” Ricafort said.

PSA data also showed that total approved investments covering those from foreign and Filipino firms fell by 31 percent to P125.95 billion in the first quarter from P181.97 billion in the same period last year.

Of the total approved investments in the first quarter, Filipino firms contributed P83.31 billion, 46 percent lower than the P153.98 billion in the same period of 2025.

Electricity, gas, steam, and air conditioning supply continued to have the largest share of total investments in the first quarter, accounting for P29.58 billion, or 23.5 percent of the total.

Accommodation and food service activities placed second with P24.03 billion (19.1 percent), while manufacturing placed third with P21.89 billion (17.4 percent).

Approved investments in the first quarter are expected to generate 21,623 jobs, 32 percent lower than the expected 31,758 jobs in the same period last year.

“For the coming months, the CREATE MORE Law would now make international investors more decisive to locate in the country with better incentives that could compete better with other ASEAN or Asian countries,” Ricafort said.

However, he said the Middle East conflict and protectionist measures in the United States (US) could weigh on foreign investments.

“Offsetting risk factors for future FDI data would be geopolitical risks on Iran or Middle East, more protectionist policies by a Trump presidency since Jan. 20, 2025 that would discourage some US companies from investing and creating more jobs outside the US, as well as a potential trade war between the US and China or other countries that could slow down the world economy and global trade,“ he said.