By Heather Caitlin P. Mañago
APPROVED foreign investments within the Philippines plunged by 50.1% 12 months on 12 months to P272.38 billion in 2025, its sharpest fall in five years, the Philippine Statistics Authority (PSA) reported on Thursday.
Preliminary data from the PSA showed that the worth of foreign commitments approved by the country’s investment promotion agencies (IPA) in 2025 was lower than P546.19 billion in 2024.
This was the steepest drop in foreign investments for the reason that 71.3% drop recorded through the pandemic in 2020.
By value, this was the bottom amount of approved foreign investments for the reason that P241.89 billion recorded in 2022.
Singapore was the highest source of investment pledges for 2025 after committing P92.78 billion, or 34.1% of the entire. It was followed by the Netherlands with P35.98 billion (13.2% share) and Japan with P34.03 billion (12.5%).
Analysts attributed the sharp drop in foreign investment pledges to the sluggish investor confidence within the Philippines arising from global trade uncertainties, natural disasters and the flood control corruption scandal.
“In a nutshell, the decline in approved foreign investment pledges in 2025 was driven by a mixture of weaker investor confidence attributable to governance and corruption issues, global economic uncertainties, cautious corporate behavior, and an unusually high base of comparison from the previous 12 months,” said Ser Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development.
Marco Antonio C. Agonia, an economist on the University of Asia and the Pacific, said uncertainty over the US tariffs can have also dissuaded foreign investors from establishing operations within the Philippines.
The US imposed a 19% tariff on most Philippine goods starting Aug. 7, 2025.
“Similarly, weaker growth prospects from repeated natural disasters and the flood control scandal can have encouraged foreign firms to scrap or defer their investment plans within the country,” Mr. Agonia said in an e-mail.
The Board of Investments (BoI) approved P150.34 billion value of investment pledges in 2025, accounting for 55.2% of the entire. It was followed by the Philippine Economic Zone Authority (PEZA) with investment pledges value P107.06 billion (39.3% share), and the Bases Conversion and Development Authority (BCDA) with P7.01 billion (2.6%).
For 2025, about 45% or P122.48 billion of the entire approved foreign investments will go to the energy sector, followed by manufacturing with P81.41 billion (29.9% share) and real-estate activities with P26.31 billion (9.7%).
In 2025, Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) cornered around P100.43 billion value of those investment pledges. Central Luzon will get P70.74 billion while the Bicol Region got P50.76 billion.
SHARP RISE IN Q4
PSA data also showed foreign investment pledges surged by 79.1% to P103.33 billion within the fourth quarter of 2025, from P57.7 billion in the identical period in 2024. This was the fastest growth for the reason that third quarter of 2024 when approved foreign investments soared by 423.4% to P143.74 billion.
“The jump in [fourth-quarter] approved foreign investments could also be attributed to base effects. The Q4 2025 reading saw a rebound coming from the low base but remains to be historically lower than previous Q4 pledge readings,” said Mr. Agonia, noting that pledges fell sharply within the fourth quarter of 2024 over tariff uncertainties.
Mr. Peña-Reyes said agencies can have also “back-loaded” approvals of enormous investments within the last months of 2025.
“There was sectoral project momentum in strategic areas like energy, IT-BPM, and infrastructure,” he said. “There was relative improvement in sentiment and continued policy support, which encouraged the finalization of deals that had been delayed earlier within the 12 months.”
Within the fourth quarter, investment commitments were approved by six IPAs — BoI, PEZA, Subic Bay Metropolitan Authority (SBMA), BoI-Bangsamoro Autonomous Region in Muslim Mindanao, Clark International Airport Corp., and Zamboanga City Special Economic Zone Authority.
The BoI approved foreign pledges value P66.19 billion accounting for 64.1% of the entire, followed by PEZA with P35 billion (or 33.9% share) and SBMA with P1.29 billion value of commitments (1.2%).
Within the fourth quarter, the Netherlands was the most important source of approved investments with P33.05 billion, accounting for 32% of the entire. This was followed by Japan with commitments value P17.88 billion (17.3%) and Singapore with commitments value P17.66 billion (17.1% share).
In the course of the October-to-December period, the Authority of the Freeport Area of Bataan, BCDA, Cagayan Economic Zone Authority, Clark Development Corp., Poro Point Management Corp., John Hay Management Corp., and Tourism Infrastructure and Enterprise Zone Authority didn’t approve any investment pledges.
The energy sector also cornered the biggest approved foreign investments with P49.41 billion within the fourth quarter, about 47.8% of the entire pledges through the period.
Around 33.6% or P34.68 billion of the approved foreign investments will go into the manufacturing industry, while 4.6% or P4.76 billion value of pledges might be invested in the knowledge and communication industry.
For the period, 45.3% of the foreign investment commitments value P46.85 billion will go to projects situated in Calabarzon.
Central Luzon cornered P35.36 billion value of investment commitments while Negros Island Region got P7.79 billion.
Should these foreign commitments materialize, these projects are expected to generate 101,164 jobs, 0.8% lower than 101,966 projected jobs a 12 months earlier.
Meanwhile, PSA data showed combined investment commitments from each foreign and Filipino investors surged by 193.8% to P1.1 trillion within the fourth quarter, from P373.7 billion in the identical period in 2024. Filipino investors contributed P994.44 billion, or 90.6% of the entire.
In 2025, total investment commitments from foreign and Filipino nationals fell by 1.7% to P1.92 trillion, from P1.96 trillion within the previous 12 months. Investment pledges by Filipinos reached P1.65 trillion last 12 months, accounting for 85.8% of the entire.
Mr. Peña-Reyes said there’ll likely be a “moderate recovery” in foreign investment pledges in the primary quarter of 2026.
“This view is supported by project pipelines and sector prospects, nevertheless it remains to be influenced by cautious investor sentiment,” he said.
“For the remaining of the 12 months, there may very well be gradual strengthening if reforms and policy clarity improve, with key sectors attracting sustained interest. Actual FDI (foreign direct investment) flows may lag pledges, but they may trend upward as confidence returns,” he added.
Then again, Mr. Agonia said investment pledges may remain subdued for the remaining of the 12 months.
“The fallout of a weaker growth outlook from the corruption scandal, its effects on government spending and consumer and investor confidence will likely extend into this 12 months, barring any major improvements to the business environment,” he said.
The PSA data on foreign investment commitments, which can materialize shortly, differ from actual foreign direct investments tracked by the BSP. The central bank’s monitoring goes beyond the projects and includes other items reminiscent of reinvested earnings and lending to Philippine units via their debt instruments.