The Philippines’ total FDI inflows fell to a nearly 10-year low in April

By Katherine K. Chan, A reporter

Total foreign direct investment (FDI) inflows in the Philippines fell to a nearly 10-year low of $250 million in April, as a global sense of uncertainty fueled investor sentiment, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Based on central bank data released on Friday, net FDI inflows fell 58.8% to $250 million in April from $607 million in the same month last year.

April saw the lowest monthly rate seen since $244 million in June 2016, and the steepest year-over-year decline since 76.1% in December 2022.

Month-on-month, net FDI inflows fell 59.1% from $611 million in March.

“The sharp drop in net FDI inflows to $250 million in April likely reflects a combination of weak credit, slower reinvestment, and continued investor caution amid an uncertain global environment,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said via Viber.

The latest level of FDI was dragged down by a 91.7% drop in net investment in debt instruments to $44 million in April from $522 million a year ago.

Reinvestment income also decreased by 1.9% to $80 million from $81 million in April 2025.
Meanwhile, investments in stocks and mutual funds more than doubled (143.5%) to P207 million in April from $85 million last year.

Foreign net investment in equity excluding reinvestment of earnings also ballooned (3,041%) annually to $127 million from $4 million previously.

Equity inflows fell 21.4% to $136 million from $112 million last year, while withdrawals fell 91.7% to $9 million from $108 million.

To Mr. In Asuncion, soft FDI inflows in April occurred as firms and investors postponed investments amid uncertain global conditions combined with weak domestic growth.

“At the same time, growing global uncertainty caused by trade tensions, ongoing political risks, and episodes of financial market volatility are likely to cause multinational firms to postpone expansion plans and take a tighter stance on remittances,” he said.

“At home, the slow economic growth at the beginning of the year may affect investment decisions,” he added.

FDI FOR FOUR MONTHS DOWN
In the four months to April, the country’s net FDI inflows reached $1.968 billion, down 26.5% from $2.675 billion in the same period last year.

This was the 15th consecutive month that the aggregate FDI rate declined year-on-year.

“The decrease was due to lower net foreign investment in debt instruments and reinvestment of earnings, which significantly reduced the increase in foreign investment in equity capital (excluding reinvestment of earnings),” the BSP said in a statement.

BSP data showed that total investment by non-residents in debt instruments fell 40.3% to $1.218 billion in the January to April period from $2.042 billion last year.

Reinvestment of earnings, meanwhile, fell 14% year-on-year to $285 million in April from $332 million a year ago.

However, net equity investment excluding reinvested profits rose 53.7% to $464 million as of April from $302 million a year ago.

This as equity placement rose 3.3% to $526 million from $509 million, with the bulk of the flow coming from Japan, the United States, and Singapore.

“This is mainly focused on the manufacturing, financial and insurance industries as well as real estate,” the BSP added.

At the same time, withdrawals fell 70.5% to $61 million in April from $207 million a year ago.

Equity and mutual fund investments also rose 18.3% to $750 million during the period from $634 million a year earlier.

According to Mr. Asuncion, the Philippines may continue to see foreign investment flows gradually in the near term, expected to recover as global financial conditions and domestic growth improve.

“That said, although FDI may remain soft in the near term, we do not expect a further decline in inflows,” he said, noting benefits from long-term investment fundamentals, improved infrastructure, ongoing investment liberalization measures, and growth opportunities in many sectors.

“As global financial conditions stabilize and domestic growth gains momentum, we expect FDI inflows to return gradually, although the pace will remain uneven given the uncertainties in the global economy,” said Mr. Asuncion.

FDIs refer to cross-border investments where a non-resident investor holds at least 10% of the shares of a resident enterprise. This may take the form of equity capital, reinvestment of earnings and corporate loans.

The BSP’s FDI data reflects the actual flow of money. This is different from the Philippine Statistics Authority’s data on foreign investment, which represents investment commitments that may not actually materialize during the reference period.

The central bank sees net FDI inflows falling to $7 trillion this year from an estimated $7.8 billion recorded in 2025.