By Katherine K. Chan, Reporter
NET INFLOWS of foreign direct investments (FDI) into the Philippines grew 12 months on 12 months for the primary time in three months in March as investor confidence stood firm, the Bangko Sentral ng Pilipinas (BSP) said.
Based on preliminary BSP data released on Wednesday, FDI net inflows climbed by 26.1% to $611 million in March from $485 million a 12 months earlier.
This was the primary time since December last 12 months that FDI net inflows posted annual growth.
“FDI net inflows posted a year-on-year increase in March primarily resulting from base effects and a few improvement in investment sentiment, particularly in equity and intercompany funding flows,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said via Viber.
Month on month, net inflows declined by 4.2% from the revised $638 million in February.
March saw the bottom level of inflows in two months or since $469 million in January, which Mr. Asuncion attributed to cautious investor sentiment amid volatile global conditions.
Central bank data showed investments in equity and investment fund shares surged by 48.2% to $243 million in March from $164 million in the identical month a 12 months ago.
Nonresidents’ investments in net equity capital apart from reinvestment of earnings also soared by 62.1% to $166 million in March from $102 million a 12 months ago.
This got here amid the 25.7% annual rise in equity capital placements to $186 million, and a 56.5% decline in withdrawals to $20 million.
Meanwhile, reinvestment of earnings stood at $78 million, 26% higher than $62 million recorded within the previous 12 months.
Net investments in debt instruments likewise increased by 14.6% to $368 million from $321 million a 12 months prior.
FIRST-QUARTER SLUMP
In the primary quarter, total FDI net inflows fell by 16.97% to $1.717 billion from $2.068 billion in the identical period last 12 months.
SM Investments Corp. Group Economist Robert Dan J. Roces said this slide was not driven by weaker investor sentiment but likely reflected caution stemming from global uncertainty.
“The softer FDI numbers in March and in the primary quarter (of 2026) suggest that investors have grow to be more cautious amid global uncertainty, slightly than signaling a pointy deterioration in sentiment toward the Philippines,” he said in a Viber message.
The US-Israeli war on Iran, which began on Feb. 28, roiled global oil markets and disrupted trade flows after access to the Strait of Hormuz was restricted.
The BSP also noted that stable foreign equity and reinvested earnings in the course of the period showed foreign investors remained confident within the Philippines.
“From January to March 2026, foreign equity and reinvested earnings remained broadly regular, indicating continued investor confidence within the country,” the central bank said in an announcement on Wednesday.
In keeping with the BSP, foreign investments in equity capital apart from reinvestment of earnings dipped by 1.1% 12 months on 12 months to $543 million as of March from $549 million previously.
However, net foreign investments in equity capital, excluding reinvestment of earnings, grew by 13.1% to $337 million in the primary quarter from $298 million within the comparable year-ago period.
This got here whilst equity placements slipped by 1.8% to $390 million, while withdrawals fell by 46.5% to $53 million.
“Equity capital placements were sourced primarily from Japan, the US, and Singapore, and were channeled largely into the manufacturing, financial and insurance, and real estate industries,” the central bank said.
Meanwhile, reinvestment of earnings amounted to $206 million within the three months to March, down 17.9% annually from $251 million.
BSP data also showed net investments in debt instruments declined by 22.7% to $1.175 billion in the primary quarter from $1.52 billion a 12 months ago.
Over the approaching months, FDI inflows into the country will hinge on external aspects like global rates of interest, geopolitical developments, and risk sentiment, in addition to on domestic growth and policy execution, Mr. Asuncion said.
“While near-term inflows may remain uneven, structural drivers resembling manufacturing, infrastructure, and provide chain diversification should support a gradual recovery over the medium term,” he added.
However, Mr. Roces noted that higher financing conditions will allow FDI inflows to regularly rise within the months ahead.
“Moving forward, inflows may regularly pick up if and when financing conditions improve, but competition for investment stays strong, making execution, policy stability, and infrastructure delivery increasingly vital in turning interest into actual investments,” he said.
FDIs check with cross-border investments through which a nonresident investor holds a minimum of 10% equity in a resident enterprise. These may take the shape of equity capital, reinvestment of earnings and intercompany borrowings.
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 won’t necessarily be realized inside the reference period.
The central bank expects FDI net inflows to succeed in $7.5 billion this 12 months.