FISCAL PLAY KEY TO FDI REBOUND FROM '25 DROP

ANALYSTS offer a troika of policies that could help the Philippines recover from a drop in foreign direct investments (FDI) last year, when investors became pensive as the country wrestled with economic and political headwinds.

- BY ANDREA SAN JUAN

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that net FDI inflows dropped by 17.1 percent to $7.8 billion in the January-to-December 2025 period from the $9.4 billion in the same period in 2024.

The drop in the FDI was pinned by Philippine Institute for Development Studies (PIDS) Senior Research Fellow John Paolo R. Rivera on tighter global financial conditions, geopolitical uncertainty and "domestic constraints." The latter includes slower growth, infrastructure delays and investment climate concerns, he explained.

Rivera added that the Philippines may have also felt the blow of stronger competition from its Asean neighbors.

Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., meanwhile, believes global investors turned more cautious last year amid high interest rates and geopolitical tensions.

Meanwhile, "some large inflows seen earlier didn't recur-creating a high base effect," Ravelas added.

Timing

FDI inflows, nonetheless, improved in December last year, amounting to $560 million, which is a 31.15-percent increase from $427 million in December 2024.