By Katherine K. Chan, Reporter

Net inflows of foreign direct investments (FDI) in the Philippines plunged to a near 10-year low of $250 million in April, as heightened global uncertainty dented investor sentiment, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Based on central bank data released on Friday, FDI net inflows declined by 58.8% to $250 million in April from $607 million in the same month last year.

April saw the lowest monthly level seen since the $244 million in June 2016, and the steepest year on year drop since the 76.1% in December 2022.

Month on month, FDI net inflows slumped by 59.1% from the $611 million in March.

“The sharp decline in FDI net inflows to $250 million in April likely reflects a combination of weaker intercompany borrowings, slower reinvestment activity, and continued investor caution amid an uncertain global environment,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said via Viber.

The latest FDI level was dragged by the 91.7% drop in net investments in debt instruments to $44 million in April from $522 million a year ago.

Reinvestment of earnings likewise slipped by 1.9% to $80 million from $81 million in April 2025.
Meanwhile, investments in equity and investment fund shares more than doubled (143.5%) to P207 million in April from $85 million the prior year.

Foreign net investments in equity capital other than reinvestment of earnings also ballooned (3,041%) annually to $127 million from $4 million previously.

Equity placements jumped by 21.4% to $136 million from $112 million a year earlier, while withdrawals plunged by 91.7% to $9 million from $108 million.

For Mr. Asuncion, the softer FDI inflows in April likely came as firms and investors deferred investments amid highly uncertain global conditions compounded by weak domestic growth.

“At the same time, heightened global uncertainty stemming from trade tensions, lingering geopolitical risks, and episodes of financial market volatility may have prompted multinational firms to defer expansion plans and adopt a more conservative stance toward capital deployment,” he said.

“Domestically, relatively subdued economic growth in the early part of the year may have also tempered investment decisions,” he added.

FOUR-MONTH FDI DOWN
In the four months to April, the country’s FDI net inflows totaled $1.968 billion, falling by 26.5% from the $2.675 billion in the same period last year.

This was the 15th consecutive month that the cumulative FDI level dropped year on year.

“The decline was driven by lower foreign net investments in debt instruments and reinvestment of earnings, which more than offset the increase in foreign net investments in equity capital (other than reinvestment of earnings),” the BSP said in a statement.

BSP data showed nonresidents’ net investments in debt instruments sank by 40.3% to $1.218 billion in the January-to-April period from $2.042 billion the previous year.

Reinvestment of earnings, on the other hand, dropped by an annual 14% to $285 million in April from $332 million a year ago.

However, net equity capital investments excluding reinvested earnings surged by 53.7% to $464 million as of April from $302 million a year ago.

This as equity capital placements edged up by 3.3% to $526 million from $509 million, with bulk of the flows coming from Japan, the United States, and Singapore.

“These were channeled largely into the manufacturing, financial and insurance, and real estate industries,” the BSP added.

At the same time, withdrawals plunged by 70.5% to $61 million in April from $207 million a year ago.

Investments in equity and investment fund shares also climbed by 18.3% to $750 million during the period from $634 million last year.

According to Mr. Asuncion, the Philippines may continue to see subdued foreign investment flows over the near term, with recovery expected as the global financial climate and domestic growth improve.

“That said, while FDI may remain soft in the near term, we do not expect a sustained collapse in inflows,” he said, noting gains from long-term investment fundamentals, enhanced infrastructure, ongoing investment liberalization measures, and growth opportunities across multiple sectors.

“As global financial conditions stabilize and domestic growth gains traction, we expect FDI inflows to gradually recover, although the pace will likely remain uneven given the lingering uncertainties in the global economy,” Mr. Asuncion added.

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.

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 sees FDI net inflows falling to a total of $7 billion this year from the estimated $7.8 billion recorded in 2025.