FDI net inflows hit 4-month high

By Katherine K. Chan, Reporter

NET INFLOWS of foreign direct investments (FDIs) into the Philippines hit a four-month high in November, even as inflows slipped year on year, the Bangko Sentral ng Pilipinas (BSP) said.    

Preliminary BSP data released on Tuesday showed that FDI net inflows dipped by 0.3% to $897 million in November from $900 million in the same month in 2024.

Month on month, inflows jumped by 39.7% from $642 million in October.

November saw the highest FDI inflows in four months or since $1.271 billion in July.

“Foreign direct investments into the Philippines posted net inflows of $897 million in November 2025,” the central bank said in a statement. “South Korea was the leading source of FDIs, with most inflows directed to the manufacturing industry during the month.”

Based on BSP data, investments in equity and investment fund shares soared by 71.6% to $187 million in November from $109 million a year ago.

Net investments in equity capital other than reinvestment of earnings more than tripled to $122 million in November, from the $35 million logged in November 2024.

This, as equity capital placements doubled year on year to $142 million from $71 million, while withdrawals dropped by 44.4% to $20 million from $36 million previously.

Meanwhile, reinvestment of earnings stood at $64 million, down by 12.7% from $74 million a year earlier.

Net investments in debt instruments fell by 10.2% annually to $711 million in November from $791 million a year ago.

According to the BSP, net investments in debt instruments include mainly intercompany borrowing or lending between foreign direct investors and their subsidiaries or affiliates in the Philippines. The rest are investments made by nonresident subsidiaries or associates in their resident direct investors, or known as reverse investment.

SM Investments Corp. Group Economist Robert Dan J. Roces said the nearly flat year-on-year change in FDI net inflows reflects steady but still selective investor sentiment.

“(It) shows stabilization after a softer stretch,” he said in a Viber message. “Some delayed equity placements and reinvested earnings likely came through, which tells you investors are pacing commitments, not exiting.”

11-MONTH SLUMP
Meanwhile, FDIs went down by 22.1% to $7.077 billion at end-November from $9.084 billion in the same period last year.

“For the first eleven months of 2025, equity capital placements were sourced primarily from Japan, the United States, Singapore, and South Korea, and were channeled largely into the manufacturing, wholesale and retail trade, and real estate industries,” the central bank said. 

BSP data showed that investments in equity and investment fund shares reached $2.297 billion in the 11-month period, declining by 10.8% from $2.576 billion the year prior.

This, as net foreign investments in equity capital, excluding reinvestment of earnings, fell by 23.3% year on year to $1.144 billion during the period from $1.491 billion.

Of the total, placements dropped by 12.2% annually to $1.741 billion, while withdrawals rose by 21.1% to $596 million.

On the other hand, reinvestment of earnings edged up by 6.2% to $1.152 billion in the period ending November from $1.085 billion in the previous year.

However, nonresidents’ net investments in debt instruments of local affiliates amounted to $4.78 billion, down 26.6% from the $6.508 billion logged as of November 2024.

FDIs account for foreign investors’ investments in local businesses where they hold at least a 10% equity capital, as well as investments by a nonresident subsidiary or associate in its resident direct investor. It can be in the form of equity capital, reinvestment of earnings or borrowings.

The BSP’s FDI data cover actual investment flows, compared to the Philippine Statistics Authority’s foreign investments data which include investment commitments that may not be fully realized in a given period.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the decline in FDI net inflows during the 11-month period shows that investors were more cautious last year.

“That mix suggests the Philippines hasn’t lost investor interest — sentiment just became more selective,” he said in a Viber message.

“The decline likely reflects global uncertainty, domestic policy noise, and tougher competition from our ASEAN (Association of Southeast Asian Nations) neighbors,” Mr. Ravelas added. “But the November bump signals that when investors see clearer direction and more stability, they begin to re‑engage.”

Mr. Roces said there could be annual growth in FDI inflows at the end of 2025 if companies log year-end reinvestments or intercompany loans, “but that will depend more on timing of flows than a sudden shift in confidence.”

Meanwhile, Mr. Ravelas said credible reforms, reduced uncertainty and faster execution could enhance the country’s investment climate.

“If the government sustains that clarity, we could turn that November momentum into a broader recovery,” he said.