UK Leads FDI Sources as Philippines Posts USD 7.33 Million Average Net FDI from 2014 to Mid-2024
September 17, 2024
According to initial reports from the Bangko Sentral ng Pilipinas (BSP), net foreign direct investment (FDI) in the Philippines saw a substantial reduction of 29 percent from June 2023 to June 2024. Despite this decline, the country’s average FDI performance over the past decade suggests a generally stable trend.
The decrease in FDI was noted as falling from USD 555 million in June 2023 to USD 394 million by June 2024. BSP forecasts an FDI total of USD 9.5 billion for this year, with expectations of reaching USD 10.5 billion by 2025.
The chart provided illustrates the annual net FDI inflows into the Philippines from 2014 to mid-2024. It highlights a long-term upward trend, peaking at USD 11.98 million in 2021. If the current trajectory persists, based on data from early 2024, PSA analysts believe that the Philippines is projected to achieve FDI levels near its decade-long average, but below the highs of 2021.
For further details from the BSP report, please refer to this link.
Month-by-month FDI data from June 2023 to June 2024 reveals notable fluctuations, with February 2024’s total experiencing the highest inflow of USD 1.361 billion. Following this peak, FDI has been on a downward trend. However, PSA analysts note that these monthly data, through the influence of several economic factors, can cause spikes or declines.
From January to June 2024, the leading contributors to FDI were:
- United Kingdom: 52 percent
- Japan: 30 percent
- United States: 7 percent
The primary sectors benefiting from these investments were:
- Manufacturing: 77 percent
- Real Estate: 10 percent
- Other Sectors: 13 percent
The United Kingdom was the top source of FDI during this period. While detailed breakdowns of investments by each leading country are not available in BSP reports, the British Chamber of Commerce of the Philippines (BCCP) notes positive outlooks for trade between the Philippines and the UK. The BCCP reported in January that UK exports to the Philippines reached GBP 1.3 billion (USD 1.71 billion; PHP 88.4 billion), including electrical equipment, mechanical generators, meat products, pharmaceuticals, and automobiles.
British Ambassador Laure Beaufils has recently expressed strong interest in enhancing trade and investment, particularly focusing on infrastructure and renewable energy.
Significantly, on September 9, Manila Electric Corp. (Meralco) and SP New Energy Corp (SPNEC) signed a deal with Actis, a London-based private equity firm, to support the development of a major solar power project. Actis will acquire a 40 percent equity stake in Terra Solar Philippines Inc. through this agreement.
