NET foreign direct investments (FDI) inflows declined both in July 2025 and in the first seven months of the year, data from the Bangko Sentral ng Pilipinas (BSP) showed.
On Friday, BSP said FDI net inflows declined by 7.5 percent from $1.4 billion in July 2024 to $1.3 billion in July 2025.
Also posting a contraction, FDI net inflows in the January to July 2025 period declined by 20 percent from the $5.9 billion posted in January to July 2024 to $4.7 billion in January to July 2025, BSP said.
The decrease in FDI net inflows during the month, BSP noted, resulted from lower nonresidents’ net investments in debt instruments, which fell by 39.4 percent, from $1.2 billion to $711 million.
BSP noted that net investments in debt instruments ‘consist mainly of intercompany borrowing and lending between foreign direct investors and their subsidiaries or affiliates in the Philippines.’
It also noted that the remaining portion of net investments in debt instruments are investments made by nonresident subsidiaries or associates in their resident direct investors.
However, BSP said the reduction was ‘tempered’ by the 450.6 percent increase in nonresidents’ net investments in equity capital (other than reinvestment of earnings), which rose from $76 million to $418 million.
Similarly, BSP said reinvestment of earnings grew by 14.3 percent, from $122 million to $139 million.
The top sources of equity capital placements in July 2025, per the BSP, were Japan and the United States, with investments primarily flowing into wholesale and retail trade, manufacturing, and real estate.
The BSP noted that FDIs include investment by a nonresident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent.
It also includes the investment made by a nonresident subsidiary/associate in its resident direct investor. Net FDI flows refer to nonresidents’ net equity capital (i.e., placements less withdrawals) + reinvestment of earnings + debt instruments (i.e., net intercompany borrowings).