The Philippines’ foreign direct investment (FDI) net inflows reached $529 million in February 2025, down by 61.9 percent from $1.4 billion net inflows seen a year ago, the Bangko Sentral ng Pilipinas (BSP) said Monday.
“This decrease was primarily attributed to base effects,” the BSP said in a statement.
FDI refers to 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. FDI can be in the form of equity capital, reinvestment of earnings and borrowings.
The BSP said the decline in FDI net inflows reflected the 85.9-percent contraction in nonresidents’ net investments in equity capital (other than reinvestment of earnings) to $108 million from $764 million in February 2024.
Nonresidents’ net investments in debt instruments and their reinvestment of earnings declined by 35.4 percent to $348 million from $540 million and 13.1 percent to $73 million from $84 million, respectively.
Net investments in debt instruments consist mainly of intercompany borrowing and lending between foreign direct investors and their subsidiaries or affiliates in the Philippines. The remaining portion of net investments in debt instruments are investments made by nonresident subsidiaries or associates in their resident direct investors. This is known as reverse investment.
The bulk of the equity capital placements in February 2025 came from Japan, the United States, Ireland and Malaysia.
These investments were largely directed towards the manufacturing, financial and insurance, real estate and information and communication industries.
Data showed that FDI net inflows in the first two months of 2025 amounted to $1.3 billion, lower by 45.2 percent than $2.3-billion net inflows recorded a year earlier.
