Declines apparent in debt instruments and enterprise equity investment, earnings reinvestment
Foreign direct investments recorded net inflows of $529 million in February 2025, a sharp drop of 61.9 percent from net inflows of $1.4 billion in February 2024, official data showed.
In a statement issued on Monday, the Bangko Sentral ng Pilipinas (BSP) attributed the decline in FDI inflows to the 85.9 percent contraction in nonresidents’ net investments in equity capital. That amount fell to $108 million in February this year from $764 million a year earlier.
Nonresidents’ net investments in debt instruments slid by 35.4 percent to $348 million in February 2025 from $540 million in the same month last year.
Earnings reinvestments fell 13.1 percent to $73 million from $84 million in the comparable period.
For the year-to-date, FDI net inflows reached $1.3 billion, lower by 45.2 percent than the $2.3 billion net inflows in January-February 2024, the BSP said.
Sources of capital
The BSP said the bulk of the equity capital placements in February 2025 came from Japan, the United States, Ireland and Malaysia.
“These investments were largely directed toward the manufacturing, financial and insurance, real estate, and information and communication industries,” the BSP said.
FDI, a measure of actual capital that entered the Philippines, refers to investment by a nonresident direct investor in a domestic enterprise where the equity capital in the latter is at least 10 percent.
FDI also includes investment made by a nonresident subsidiary or associate in its resident direct investor.
Actual vs pledged investment
The BSP explained that its FDI statistics differ from investment data from other government sources.
“BSP’s FDI covers actual investment inflows. In contrast, the approved foreign investment data published by the Philippine Statistics Authority (PSA) are sourced to Investment Promotion Agencies (IPAs).”
“These represent investment commitments, which may not be fully realized in a given period,” BSP said.
“The PSA data are not based on the 10-percent foreign ownership criterion defined by the BSP. The PSA’s foreign investment data do not account for equity withdrawals,” the BSP explained.
