FDI climbed to 12-mo high in July
Foreign direct investments (FDI) in the Philippines climbed to a 12-month high in July after a milder contraction, though persistent headwinds—from escalating US trade tensions to a widening corruption scandal over flood control projects—could weigh on investor confidence.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that inflows exceeded outflows by $1.3 billion, a net gain. While that was 7.5 percent lower than a year earlier, it marked a narrower drop than the 17.8-percent decline recorded in June.
Even so, July’s tally was the strongest since the same month last year, when the net inflow reached $1.4 billion.
Angelo Taningco, chief economist at Security Bank, said the July drop mainly reflected a high base from strong inflows a year earlier. But he warned of challenging times ahead.
“I expect FDI inflows to be tempered by increased external uncertainty from higher US tariffs as well as domestic governance issues surrounding government flood control projects,” Taningco said.
“Moderation in both investor sentiment and business confidence will likely ease FDI inflows over the near term,” he added.
For the first seven months, FDI totaled $4.7 billion—down about 20 percent from the same period in 2024 but already more than halfway toward the central bank’s year-end forecast of a $7.5 billion net inflow.
Unlike foreign portfolio investments, which can flee at the first sign of trouble, FDI tends to be longer-term capital that can create jobs. The government has been seeking to draw more of such inflows while retaining those already here.
Data showed the Philippines recorded a net equity inflow in July, as fresh capital more than offset a drop in funds leaving the country.
