FDI net inflows hit 7-month high in August

By Katherine K. Chan, Reporter  

NET inflows of foreign direct investments (FDI) to the Philippines jumped by nearly 25% in August to its highest level in seven months, Bangko Sentral ng Pilipinas (BSP) data showed.

The Philippines posted a $690-million FDI net inflow in August, up 24.9% from $552 million a year ago.

This was the highest monthly net inflow in seven months or since January’s $800 million.

Month on month, net inflows edged up by 0.15% from $689 million.

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

Based on BSP data, investments in equity and investment fund shares surged by 42.4% to $554 million in August from $389 million a year earlier.

Nonresidents’ investments in net equity capital other than reinvestment of earnings increased by an annual 29.5% to $189 million from $146 million.

Equity capital placements soared by 60.8% to $254 million in August from $158 million the prior year, while withdrawals increased fivefold to $65 million from $13 million.

On the other hand, reinvestment of earnings stood at $365 million, up by 50.2% from $243 million a year ago.

However, net investments in debt instruments fell by 16.7% annually to $136 million in August from $164 million in the same month last year.

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.

EIGHT-MONTH INFLOWS
Meanwhile, the country’s eight-month net FDI inflows fell by 19.2% to $4.768 billion from $5.902 billion a year ago.

“The decline was driven mainly by lower net investments in debt instruments,” the central bank said in a statement late Tuesday. “This reflected lower net intercompany borrowings from foreign direct investors during the period.”

As of August, investments in equity and investment fund shares reached $2.203 billion, slipping by 1.7% from $2.241 billion the year prior.

Net foreign investments in equity capital, excluding reinvestment of earnings, were flat in the eight months to August at $870 million from $871 million last year.

According to the BSP, equity capital placements as of August flowed mostly from Japan, the United States, and Singapore, falling by 13.2% to $1.185 billion from $1.365 billion a year ago.

These were poured into the local manufacturing, financial and insurance, and real estate industries, the central bank added.

Withdrawals likewise declined by 36.4% to $314 million as of August from $494 million in the comparable year-ago period.

On the other hand, reinvestment of earnings inched down by 2.7% to $1.333 billion in the period ending August from $1.37 billion the previous year.

Nonresidents’ net investments in debt instruments of local affiliates stood at $2.565 billion, down 30% from the $3.661 billion logged as of August 2025.

The BSP’s FDI data reflect actual investment flows. This differs from the Philippine Statistics Authority’s approved foreign investment data, which represent investment commitments that may not necessarily be realized within the reference period.

The central bank expects FDI net inflows to fall to $6.5 billion this year from $8.1 billion in 2025.