FDI net inflow drops to 5-year low in 2025, but higher than BSP goal

Net inflows of foreign direct investments declined to a four-month low in December 2025, bringing the full-year level to the weakest in five years, but still above the $7-billion projection of the Bangko Sentral ng Pilipinas (BSP).

Central bank data show that FDI net inflows stood at $560 million in December, down from the $894 million in November and the lowest since the $316 million in September last year, but 31.2% higher than the $427 million recorded in December 2024.

“Japan was the leading source of FDIs, with most inflows directed to financial and insurance activities during the month,” the BSP said in an accompanying statement.

This brought the full-year FDI net inflows to $7.791 billion, down from $9.398 billion in 2024, and the lowest since $6.822 billion in 2020, during the height of the COVID-19 pandemic lockdowns. This is still higher, however, than the $7-billion projection made by the BSP.

Data on FDI include investment by a nonresident direct investor in a Philippine-based enterprise, where the investor owns at least 10% of the company’s equity. It also includes investments made by a foreign subsidiary or associate in its Philippine parent or direct investor.

FDIs can be in the form of equity capital, reinvestment of earnings, and borrowings.

Net equity capital placements for the year, excluding reinvestment of earnings were recorded at $1.324 billion, higher than the $1.008 billion the previous year. Reinvestment of earnings likewise increased to $1.198 billion from $1.170 billion.

“For the full year of 2025, equity capital placements were sourced primarily from Japan, the United States, Singapore, and South Korea,” the central bank said.

Such placements were channeled mainly into the manufacturing, wholesale and retail trade, and financial and insurance industries.

Net debt instruments for the year were recorded at $5.269 billion, down from $7.221 billion in 2024.—AOL, GMA Integrated News