By Katherine K. Chan, Reporter
The Philippines posted the highest net inflows of foreign direct investments in six months even as they declined by over 40% year on year in July, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.
FDIs in the country yielded a net inflow of $689 million in July, plunging by 44.1% from the $1.233 billion recorded a year ago.
This was the highest monthly inflow in six months or since the $799 million in January, but marked the first annual decline since April.
Month on month, however, the net inflow surged by 54.1% from $447 million.
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.
Central bank data showed investments in equity and investment fund shares declined by 37.3% to $324 million in July from $517 million in the same month last year.
Nonresidents’ investments in net equity capital other than reinvestment of earnings also plummeted by 55.5% to $186 million in July from $418 million a year earlier.
This came amid the 56.7% year-on-year slide in equity capital placements to $199 million from $460 million, and a 69% slump in withdrawals to $13 million from $42 million.
Meanwhile, reinvestment of earnings amounted to $138 million in July, up by 39.9% from $99 million a year ago.
However, net investments in debt instruments fell by an annual 49.1% to $365 million from $717 million.
These consisted mainly of intercompany borrowing or lending between foreign direct investors and their subsidiaries or affiliates in the Philippines, according to the central bank. The rest are investments made by nonresident subsidiaries or associates in their resident direct investors, or known as reverse investment.
SEVEN-MONTH INFLOWS
In the seven months to July, FDI net inflows came in 23.9% lower year on year at $4.071 billion than the $5.35 billion logged previously.
“The decline reflected lower net inflows across all major FDI components,” the central bank said in a statement released late on Monday.
As of July, investments in equity and investment fund shares declined by 11.3% to $1.643 billion from $1.852 billion in the same period in 2025.
Net foreign investments in equity capital, excluding reinvestment of earnings, dropped by 6.9% to $675 million in the seven-month period from $725 million.
Broken down, placements went down by 23.4% annually to $924 million as of July from $1.206 billion a year ago, while withdrawals slumped by 48.2% to $249 million from $481 million.
“Capital placements came primarily from Japan, the United States, and Singapore,” the BSP said. “These funds were channeled largely into the manufacturing, financial and insurance, and real estate industries.”
BSP data also showed reinvestment of earnings stood at $968 million in the seven-month period, falling by 14.2% from $1.127 billion a year earlier.
Net investments in debt instruments likewise declined by 30.6% to $2.428 billion as of July from $3.498 billion.
For this year, the central bank sees FDI net inflows sliding to $7 billion from the estimated $7.8 billion last year.
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.