By Katherine K. Chan, A reporter
NET foreign direct INFLOWS investment (FDI) in PhilThe ippines grew year-on-year for the first time in three months in March as an investor confidence he stopped it is strongthe Bangko Sentral ng Pilipinas (BSP) said.
Based on preliminary BSP data released on Wednesday, FDI inflows increased 26.1% to $611 million in March from $485 million a year ago.
It was the first time since December last year that FDI inflows have grown annually.
“FDI inflows posted a year-on-year increase in March mainly due to fundamental effects and some improvement in investment sentiment, especially in equity and mutual fund flows,” said Union Bank of the Philippines chief economist Ruben Carlo O. Asuncion via Viber.
Month-over-month, net inflows fell 4.2% from the $638 million revised in February.
March saw the lowest level of cash flow in two months or from $469 million in January, Mr.
Central bank data showed investments in stocks and mutual funds rose 48.2% to $243 million in March from $164 million in the same month last year.
Investment by non-residents in equity excluding reinvestment of earnings also increased by 62.1% to $166 million in March. up from $102 million last year.
This occurred amid a 25.7% year-over-year increase in equity capital placements to $186 million, and a 56.5% decline. in the withdrawal of 20 million dollars.
Meanwhile, reinvestment income stood at $78 million, 26% higher than the $62 million recorded last year.
Total investment in debt instruments likewise increased 14.6% to $368 million from $321 million last year.
FIRST QUARTER SLUMP
In the first quarter, the amount FDI inflows fell by 16.97% to $1.717 billion from $2.068 billion in the same period last year.
The economist of SM Investments Corp. Robert Dan J. Roces said this slide was not driven by weak investor sentiment but may reflect caution from global uncertainty.
“The soft FDI numbers in March and the first quarter (of 2026) suggest that investors are more cautious amid global uncertainty, rather than indicating a major deterioration in sentiment about the Philippines,” he said in a Viber message.
The US-Israel war on Iran, which began on Feb. 28, attacked oil markets around the world and disrupted trade after being denied access to the Strait of Hormuz.
The BSP also noted that the stable foreign exchange and reinvested earnings during the period showed foreign investors remain confident in the Philippines.
“From January to March 2026, foreign equity and reinvested capital remained stable, indicating that investors continue to trust the country,” the central bank said in a statement on Wednesday.
According to the BSP, foreign investment in equity excluding reinvestment of earnings fell 1.1% year-on-year to $543 million as of March from $549 million previously.
On the other hand, net foreign investment in equity, excluding reinvestment of earnings, grew by 13.1% to $337 million in the first quarter from $298 million in the comparable period last year.
This happened as share placements fell 1.8% to $390 million, while withdrawals fell 46.5% to $53 million.
“Equity investments were mainly from Japan, the United States and Singapore, and were concentrated in the manufacturing, financial and insurance industries and real estate,” the central bank said.
Meanwhile, reinvestment income reached $206 million in the three months to March, down 17.9% year-on-year from $251 million.
BSP data also showed net investment in debt instruments fell 22.7% to $1.175 billion in the first quarter from $1.52 billion last year.
In the coming months, FDI inflows into the country will depend on external factors such as global interest rates, the country’s development, and risk perception, as well as domestic growth and policy making, said Mr. Asuncion.
“While short-term inflows may remain uneven, structural drivers such as manufacturing, infrastructure, and supply diversification should support a gradual recovery in the medium term,” he added.
On the other hand, Mr. Roces noted that better financial conditions will allow FDI inflows to increase gradually in the coming months.
“Going forward, income may pick up a bit more as financial conditions improve, but investment competition remains strong, making execution, policy stability, and infrastructure delivery more important in turning interest into real money,” he said.
FDIs refer to cross-border investments where a non-resident investor holds at least 10% of the shares of a resident enterprise. This may take the form of equity capital, reinvestment of earnings and corporate loans.
The BSP’s FDI data reflects the actual flow of money. This is different from the Philippine Statistics Authority’s data on foreign investment, which represents investment commitments that may not actually materialize during the reference period.
The central bank expects FDI inflows to reach $7.5 billion this year.
