Foreign direct investment (FDI) net inflows into the Philippines fell to $2.2 billion in the first five months of 2026, down from $3.3 billion during the same period in 2025, according to the Bangko Sentral ng Pilipinas (BSP).
The central bank attributed the drop primarily to weaker foreign investments in debt instruments, driven by lower intercompany borrowings from foreign direct investors, and reduced earnings retained for local reinvestment. These factors outweighed a rise in net equity capital investments excluding reinvested earnings.
Despite the overall decline, equity capital placements grew from January to May, signaling sustained foreign investor interest in specific sectors. Japan, the United States and Singapore emerged as the top sources of these placements, which flowed predominantly into manufacturing, financial and insurance and real estate industries.
The lower FDI figures reflect a challenging economic landscape, where global and domestic uncertainties, shifting financing conditions, and cautious business outlooks weighed on overall investment decisions.