MANILA — Foreign direct investment (FDI) inflows into the Philippines fell by 44.1 percent year-on-year in July to US$689 million, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP), despite the Marcos administration’s efforts to attract foreign capital through investment pledges secured during overseas trips.
The July figure was lower than the US$1.23 billion recorded in the same month last year, although it marked an improvement from the US$447 million in net FDI inflows registered in June.
The BSP attributed the annual decline largely to weaker investments in debt instruments, which dropped to US$365 million in July from US$717 million a year earlier.
The latest figures also showed that cumulative net FDI inflows reached US$4.07 billion from January to July 2026, down 23.9 percent from the US$5.35 billion recorded during the corresponding period in 2025.
The central bank said the contraction reflected reduced net inflows across the major components of FDI.
Net investments in debt instruments declined by 30.6 percent to US$2.43 billion from US$3.5 billion a year earlier. Reinvestment of earnings likewise fell by 14.1 percent to US$968 million from US$1.13 billion.
FDI refers to investments made by foreign investors in Philippine enterprises in which they hold at least a 10-percent equity stake. These investments include equity capital, reinvested earnings and debt instruments.
The BSP’s figures measure actual net investment flows, including equity investments minus withdrawals. They differ from the approved foreign investment figures released by the Philippine Statistics Authority, which reflect commitments recorded through investment promotion agencies and do not necessarily represent capital already brought into the country.
The latest data come amid the administration’s continuing efforts to position the Philippines as an attractive destination for foreign investors.
Among the government’s initiatives are the Luzon Economic Corridor and the Pax Silica initiative, alongside measures involving tax agreements and international taxation standards intended to improve the business environment and facilitate cross-border investments.
However, the sustained decline in FDI inflows comes as investor confidence faces challenges following the flood control controversy that emerged last year, adding pressure on the government to translate investment commitments into actual capital entering the economy. – Tracy Cabrera
ia/xf
