Foreign direct investment into the Philippines weakened in the first half of 2026, but a rise in fresh equity placements suggests overseas investors are still willing to put new money into the country.
FDI net inflows totaled $3.4 billion from January to June, down from the same period in 2025, as lower intercompany borrowings and weaker reinvestment of earnings pulled down the overall figure.
The headline decline, however, masks a notable improvement in equity capital investments, which climbed year-on-year during the six-month period.
Investors from Japan, the United States and Singapore emerged as the biggest sources of fresh capital, directing funds mainly into manufacturing, financial and insurance activities, and real estate.
The stronger equity numbers offer a more positive reading of investor sentiment than the overall FDI figure suggests.
Unlike intercompany debt, which largely reflects loans between foreign parent firms and their Philippine subsidiaries, equity placements represent direct capital commitments into businesses and projects.
That means foreign companies may be borrowing less from their overseas affiliates, but some are still prepared to commit fresh capital to Philippine operations.
The manufacturing sector was among the biggest beneficiaries, an encouraging signal for policymakers seeking to attract investments capable of creating jobs, expanding production capacity and strengthening local supply chains.
Financial and insurance activities and real estate also attracted significant foreign capital, underscoring continued interest in sectors tied closely to domestic economic activity.
Still, the drop in total FDI highlights the challenge facing the Philippines as it competes with other Southeast Asian economies for global capital.
With foreign investors becoming increasingly selective, the country will need to sustain improvements in infrastructure, ease of doing business, policy stability and investment incentives to convert interest into larger and more consistent inflows.
The next test will be whether the rise in fresh equity investments continues in the second half of 2026.
For now, the numbers point to a mixed but important message: overall FDI may be down, but foreign investors have not stopped betting on the Philippines.