The decline in FDI may be attributed to concerns over slowing economic growth and relatively high inflation levels globally.
In terms of components, net investments in debt instruments, which declined by 7.7 percent to US$663 million, continued to comprise most of the country’s FDI for the period.
Meanwhile, net equity investments other than reinvestment of earnings registered the highest decline of 33.8 percent to US$136 million.
Bulk of the equity capital placements during the month came from Japan, the United States, and Singapore. The said investments were channeled mostly to the 1) manufacturing; 2) real estate; and 3) financial and insurance industries.
The year-to-date FDI net inflows reached US$2.9 billion, albeit lower by 18.0 percent than the US$3.6 billion recorded in the comparable period in 2022 (Figure 2).
1 The BSP statistics on FDI are compiled based on the Balance of Payments and International Investment Position Manual, 6th Edition (BPM6). FDI includes (a) investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and (b) investment made by a non-resident subsidiary/associate in its resident direct investor. FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.
2 The BSP FDI statistics are distinct from the investment data of other government sources. BSP FDI covers actual investment inflows. By contrast, the approved foreign investments data that are published by the Philippine Statistics Authority (PSA), which are sourced from Investment Promotion Agencies (IPAs), represent investment commitments, which may not necessarily be realized fully, in a given period. Further, the said PSA data are not based on the 10 percent ownership criterion under BPM6. Moreover, the BSP’s FDI data are presented in net terms (i.e., equity capital placements less withdrawals), while the PSA’s foreign investment data do not account for equity withdrawals.
 Net investments in debt instruments consist mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines. The remaining portion of net investments in debt instruments are investments made by non-resident subsidiaries/associates in their resident direct investors, i.e., reverse investment.