PH FDI Net Inflows Sink to 10-Month Low in Feb 2025 Amid Global Tensions, High Base Effects

Foreign direct investment (FDI) net inflows into the Philippines dropped sharply in February 2025, reaching a 10-month low of $529 million—down 61.9% from $1.062 billion in the same period last year, according to the Bangko Sentral ng Pilipinas (BSP).

The central bank attributed the significant decline mainly to base effects. Economists also pointed to growing geopolitical uncertainties and protectionist policies affecting investor confidence.

RCBC chief economist Michael Ricafort highlighted U.S. President Donald Trump’s tariff-driven policies, which may incentivize businesses to stay within U.S. borders. He also cited ongoing maritime tensions between the Philippines and China, and broader regional instability, including China-Taiwan issues, as additional deterrents for foreign investors.

BSP data showed equity capital placements dropped by 85.9% year-on-year to $108 million, while investments in debt instruments and reinvested earnings also fell by 35.4% and 13.1%, respectively.

Japan, the U.S., Ireland, and Malaysia remained the top sources of FDI, with investments mostly funneled into manufacturing, finance, real estate, and ICT sectors.

Year-to-date net FDI inflows stood at $1.3 billion, down 45.2% from $2.3 billion in the first two months of 2024.