By Katherine K. Chan, Reporter
NET INFLOWS of foreign direct investments (FDI) into the Philippines plunged nearly 40% 12 months on 12 months in October, as foreigners’ net investments in debt instruments slumped.
Based on preliminary Bangko Sentral ng Pilipinas (BSP) data, FDI net inflows declined by 39.8% to $642 million in October from $1.067 billion in the identical month in 2024.
Despite this, October saw the best monthly FDI level in three months or because the $1.271-billion net inflows posted in July.
Month on month, inflows greater than doubled (100.6%) from the five-year low of $320 million in September.
“Foreign direct investments into the Philippines posted net inflows of $642 million in October 2025,” the BSP said in an announcement released late on Monday. “Japan was the highest source of FDIs, while corporations engaged in financial and insurance activities were the most important recipients of FDIs throughout the month.”
The year-on-year decline got here as nonresidents’ net investments in debt instruments plummeted by an annual 50.7% to $437 million from $888 million.
Nevertheless, this was tempered by higher inflows recorded across other FDI components.
Investments in equity and investment fund shares jumped by 14.5% to $205 million in October 2025 from $179 million in the identical month within the previous 12 months.
Nonresidents’ net investments in equity capital, aside from the reinvestment of earnings, jumped by 17.1% to $117 million in October from $100 million a 12 months earlier.
Broken down, equity capital placements grew by 10.7% to $135 million in October from $122 million a 12 months ago, while withdrawals dropped by 17.4% to $19 million from $23 million a 12 months ago.
Meanwhile, reinvestment of earnings rose by 11.3% 12 months on 12 months to $88 million in October from $79 million a 12 months ago.
HSBC economist for ASEAN Aris D. Dacanay noted that the annual drop indicated that the continuing corruption scandal curbed FDI inflows, prompting investors to adopt a cautious “wait-and-see” stance.
“I believe it does show that it’s affected by the scandal,” he told a press briefing on Tuesday. “The dip in itself has led foreign investors to have this wait-and-see approach on what’s happening within the Philippines. So, I can’t say that it doesn’t (affect FDIs). What I actually have to say is that it won’t totally reverse it.”
Last 12 months, a series of widespread flooding across the country exposed multiple anomalous flood control projects and embroiled Public Works officials, lawmakers and personal contractors in corruption allegations.
Mr. Dacanay said the Philippines’ favorable demographics, tariff advantage and robust business process outsourcing sector will keep FDIs on target and will even help attract more investments into the country’s export-oriented industries.
Alternatively, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the October figures suggest that corporate financing decisions weighed more on foreign investments than political aspects.
“Month on month, though, we bounced back just because September was (at) a five‑12 months low — so October looked stronger as funding cycles normalized,” he said via Viber. “The flood control scandal added noise, but the info show the larger driver was corporate financing decisions, not politics.”
10-MONTH SLIDE
Meanwhile, BSP data also showed that FDI net inflows fell by 24.5% to $6.179 billion as of October from $8.184 billion within the comparable year-ago period.
“Net foreign direct investments declined 12 months on 12 months for the month of October 2025 (-39.8%) and from January-October 2025 (-24.5%) amid external risk aspects particularly Trump’s higher tariffs, trade wars (and) protectionist policies that slowed down the US and global economy,” Rizal Industrial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Nonresidents’ investments in equity and investment fund shares amounted to $2.11 billion within the 10 months to October, 14.5% lower than the $2.468 billion a 12 months earlier.
Investments in equity capital, aside from the reinvestment of earnings, slid by 29.8% to $1.022 billion throughout the period from $1.456 billion within the prior 12 months.
This as placements dropped by 16.4% 12 months on 12 months to $1.599 billion as of October from $1.912 billion a 12 months ago. Alternatively, withdrawals climbed 26.5% to $577 million from $456 million a 12 months ago.
Most equity capital placements within the 10-month period got here from Japan, the US and Singapore.
“Industries that received most of those investments were manufacturing, wholesale and retail trade, and real estate,” the central bank said.
Meanwhile, nonresidents’ reinvestment of earnings increased by 7.6% to $1.088 billion as of October from $1.011 billion.
Nevertheless, net investments in debt instruments dropped by 28.8% to $4.069 billion within the period ending October from $5.717 billion a 12 months ago.
Mr. Ravelas said the BSP’s forecast of $7 billion in FDI net inflows by end-2025 stays within sight, especially if investments stabilize within the last two months of the 12 months.
“What’s going to help? Strong capital from Japan, the US, and Singapore, continued investments in manufacturing, retail, and real estate, and clearer governance signals that reassure investors. If we stay focused on stability and reforms, the Philippines can keep pulling in long‑term capital despite the noise,” he added.
FDIs account for foreign investors’ investments in local businesses where they hold no less than a ten% equity capital, in addition to investments by a nonresident subsidiary or associate in its resident direct investor. It could be in the shape of equity capital, reinvestment of earnings or borrowings.
The BSP’s FDI data cover actual investment flows, in comparison with the Philippine Statistics Authority’s foreign investments data which include investment commitments that might not be fully realized in a given period.