Foreign direct investment (FDI) net inflows to the Philippines reached $529 million in February 2025, a sharp drop of 61.9% compared to the $1.4 billion recorded in the same month last year, according to data from the Bangko Sentral ng Pilipinas (BSP).
The drop was mainly due to base effects, as February 2024 posted unusually high FDI levels. The decline was most evident in equity capital investments, which fell by 85.9% to $108 million. Investments in debt instruments also dropped by 35.4% to $348 million, while reinvestment of earnings slipped by 13.1% to $73 million.
Despite the slowdown, Japan, the United States, Ireland, and Malaysia remained the top sources of equity capital. The investments were mainly funneled into manufacturing, financial and insurance, real estate, and ICT sectors.
Year-to-date, total FDI net inflows for January to February stood at $1.3 billion, down 45.2% from $2.3 billion in the same period last year.
What This Means for Filipinos
FDI inflows bring money into the country, help create jobs, and boost business activity. A significant drop like this could signal weaker investor confidence or cautious spending by foreign firms. This can affect the pace of economic growth, limit job opportunities, and reduce funding available for business expansion, especially in key sectors.
However, the BSP says the slowdown is partly due to the unusually high figures last year and not necessarily a sign of long-term decline. (ASC)
0 Comments