Manila: Improved governance and reform measures are expected to help restore investor confidence and support a recovery in foreign direct investment (FDI) inflows this year, an economist said, following lower FDI figures reported by the Bangko Sentral ng Pilipinas (BSP). The BSP announced that net FDI inflows reached USD897 million in November 2025, which is slightly lower compared to the USD901 million recorded in the same month in 2024.

According to Philippines News Agency, most of the FDI inflows were from South Korea and were primarily directed to the manufacturing sector. For the first 11 months of 2025, net FDI totaled USD7.1 billion, showing a decline from USD9.1 billion in the same period the previous year. The major sources of FDI were Japan, the United States, Singapore, and South Korea, with the investments largely placed in manufacturing, wholesale and retail trade, and real estate.

Rizal Commercial Banking Corporation chief economist Michael Ricafort attributed the decline partly to concerns over US trade policies and a wait-and-see stance by investors amid domestic political noise late last year. He emphasized that improved governance standards and reforms would be crucial in enhancing international investor confidence and sentiment, including for FDIs.

Ricafort further noted that potential rate cuts by the US Federal Reserve and the BSP could support investments by lowering borrowing costs. Other growth-supporting measures could include monetary easing and fiscal expansion, provided that policy space allows.