The Philippines captured Foreign Direct Investment (FDI) inflows of US$5.1 billion in the first seven months of 2022, down 12.0% year-on-year, according to preliminary data from the Philippine government.

Mostly, the lower inflow of resources was due to a drop in net debt instruments from $4.1 billion in the first seven months of 2021 to $3.6 billion in the same period of 2022.

The Philippines has a mixed economy, where the government participates directly in certain economic activities through public financial institutions (PFIs) and state-owned and controlled corporations (GOCCs).

These corporations are those in which the government owns at least 51% of the equity, either directly or indirectly through its agencies.

In addition, the government actively encourages private investment, both domestic and foreign.

The Philippines has undertaken trade and investment liberalization along with deregulation of the financial system, foreign exchange liberalization, tax reforms, accelerated privatization, increased competition in the provision and operation of public utilities, and deregulation of the oil and energy industries.

Philippines FDI

Foreign direct investment decreased mainly due to a drop in net investments in the electricity, gas, steam and air conditioning sectors, which went from a net inflow of US$246.7 million in the first seven months of 2021 to US$12.5 million in the same period of 2022.

Also, influential was the reduction in net investments in financial and insurance activities, which dropped from US$204.3 million to US$111.5 million in the same period.

However, these decreases were partially offset by an increase in net investments in construction, which rose from 12.6 million to 151.1 million, as well as in real estate activities, which grew from 85.2 million to 116.0 million in the first seven months of 2022 compared to 2021.