Philippines FDI inflows reach six-month high in July as annual pace weakens

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Philippines FDI July high

Highlights

Philippines' net FDI inflows reached a six-month high in July at $689 million, up 54.1% from June but down 44.1% year on year.
For January–July, FDI net inflows dropped 23.9% to $4.071 billion as declines were recorded in equity, reinvestments, and debt instruments.
BSP projects FDI net inflows to moderate to $7 billion in 2026 from an estimated $7.8 billion in 2025, reflecting a cautious sector outlook.

July inflow trends and investment breakdown

As reported by BusinessWorld, citing Bangko Sentral ng Pilipinas, the country posts a net foreign direct investment inflow of $689 million in July, down 44.1% from $1.233 billion a year earlier but up 54.1% from $447 million in June. The July reading is the highest monthly inflow in six months, or since $799 million in January, and marks the first annual decline since April.

Foreign direct investments refer to cross-border investments in which a nonresident investor holds at least 10% equity in a resident enterprise. These flows can take the form of equity capital, reinvestment of earnings and intercompany borrowings.

Central bank data show investments in equity and investment fund shares decline 37.3% year on year to $324 million in July from $517 million. Nonresidents' investments in net equity capital other than reinvestment of earnings fall 55.5% to $186 million from $418 million, as equity capital placements drop 56.7% to $199 million and withdrawals decline 69% to $13 million.

Reinvestment of earnings rises 39.9% to $138 million from $99 million a year earlier. Net investments in debt instruments, which consist mainly of intercompany borrowing or lending between foreign direct investors and their Philippine subsidiaries or affiliates, decrease 49.1% to $365 million from $717 million.

Seven-month performance and sector outlook

In the seven months to July, FDI net inflows total $4.071 billion, 23.9% lower than $5.35 billion in the same period a year earlier. The central bank says the decline reflects lower net inflows across all major FDI components.

As of July, investments in equity and investment fund shares slip 11.3% to $1.643 billion from $1.852 billion, while net foreign investments in equity capital excluding reinvestment of earnings fall 6.9% to $675 million from $725 million. Placements decrease 23.4% to $924 million and withdrawals drop 48.2% to $249 million.

Capital placements come primarily from Japan, the U.S., and Singapore, and are channeled largely into manufacturing, financial and insurance, and real estate, the BSP says. Reinvestment of earnings in the January-to-July period declines 14.2% to $968 million, while net investments in debt instruments fall 30.6% to $2.428 billion.

For 2026, the BSP sees FDI net inflows easing to $7 billion from an estimated $7.8 billion in 2025. The central bank also notes that its FDI figures reflect actual investment flows, unlike approved foreign investment data from the Philippine Statistics Authority, which capture commitments that may not be realized within the reference period.

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