Philippines secured $8.9 billion worth of foreign direct investments in 2024

The Philippines secured $8.9 billion in foreign direct investment in 2024, nearly unchanged from 2023, data from the Bangko Sentral ng Pilipinas showed Monday.

The central bank said net foreign direct investment inflows totaled $110 million in December 2024, down 85.2 percent from $743 million a year earlier.

Foreign direct investment includes investment by a nonresident direct investor in a resident enterprise, where the equity capital in the latter is at least 10 percent. It also includes investment made by a nonresident subsidiary or associate in its resident direct investor. Foreign direct investment can be in the form of equity capital, reinvestment of earnings and borrowings.

While nonresidents’ net equity capital investments rose, foreign direct investment declined due to increased debt repayments by resident corporations to their nonresident direct investors.

As a result of higher debt repayments, net foreign investments in debt instruments shifted to net outflows of $19 million in December 2024 from net inflows of $618 million in December 2023.

Net investments in debt instruments consist mainly of intercompany borrowing and lending between foreign direct investors and their subsidiaries or affiliates in the Philippines. The remaining portion of net investments in debt instruments are investments made by nonresident subsidiaries or associates in their resident direct investors.

Reinvestment of earnings fell 14.7 percent to $80 million from $94 million. Meanwhile, nonresidents' net investments in equity capital, other than reinvestment of earnings, rose 58 percent to $49 million from $31 million in December 2023.

Equity capital placements in December 2024 came primarily from Singapore, Japan, the United States and South Korea. These investments were mostly directed toward the information and communication, manufacturing, financial and insurance, construction and real estate industries.

“For the full year of 2024, FDI net inflows remained broadly stable and settled at $8.9 billion,” the central bank said.

The central bank's statistics on foreign direct investment are compiled based on the Balance of Payments and International Investment Position Manual, 6th Edition. They are different from the investment data of other government sources.

Foreign direct investment covers actual investment inflows, while the approved foreign investments data published by the Philippine Statistics Authority are sourced from investment promotion agencies, representing investment commitments, which may not necessarily be fully realized in a given period.

The Philippine Statistics Authority data are also not based on the 10 percent foreign ownership criterion under the Balance of Payments and International Investment Position Manual, 6th Edition.