FDI inflows rise in December

Foreign direct investments (FDI) posted net inflows of USD560 million in December 2025, higher than the USD427 million recorded in the same month a year earlier, according to data released by the Bangko Sentral ng Pilipinas (BSP).

The BSP said Japan emerged as the largest source of investments during the month, with most inflows directed to financial and insurance activities.

FDIs refer to investments made by a non-resident investor in a resident enterprise where the foreign investor owns at least 10 percent of the company’s equity. These may take the form of equity capital, reinvested earnings, or borrowings.

Despite the increase in December, total FDI inflows for the full year declined. From January to December 2025, net inflows reached USD7.8 billion, lower than the USD9.4 billion recorded in 2024.

Equity capital placements mainly came from Japan, the United States, Singapore, and South Korea.

The central bank said investments were largely channeled into the manufacturing sector, as well as wholesale and retail trade, and financial and insurance services.

According to Michael Ricafort, chief economist of Rizal Commercial Banking Corporation, the lower FDI inflows last year were partly due to political uncertainties that prompted some investors to adopt a wait-and-see stance.

“For the coming months, improved governance standards and reforms would help improve international investor confidence and sentiment, including for FDIs,” Ricafort said.