Manila: The Philippines remains an attractive investment destination, but an economist said faster project execution and policy consistency are crucial to locking in more foreign capital. 'As interest rates continue to ease globally and supply chain diversification trends continue, the Philippines remains well-positioned to attract investments in manufacturing, logistics, digital infrastructure, renewable energy, and services,' Reyes Tacandong and Co. Senior Adviser Jonathan Ravelas said in a Viber message Monday. 'The challenge is to convert investor interest into actual investments through faster project implementation and policy consistency.'

According to Philippines News Agency, data released by the Bangko Sentral ng Pilipinas (BSP) showed that net inflows of foreign direct investments declined to USD210 million in May this year. This brought the January to May 2026 data to USD2.17 billion, down from the USD3.27 billion recorded in the same period last year. Equity capital placements were sourced primarily from Japan, the United States, and Singapore. These were channeled largely into the manufacturing, financial and insurance, and real estate industries.

Ravelas attributed the decline in FDIs to a combination of global and domestic factors. He said that globally, investors remain cautious amid heightened geopolitical tensions, trade uncertainties, and volatile financial markets, leading many firms to delay or scale back investment decisions. 'Domestically, while the Philippines continues to post respectable growth, investors are looking for clearer signals on policy execution, infrastructure rollout, power costs, and the overall ease of doing business,' Ravelas said.

'What is noteworthy is that the decline appears to be driven more by investor caution than a loss of confidence in the Philippines. We are seeing investors become more selective rather than exiting altogether. The country's strong consumer market, favorable demographics, and ongoing economic reforms remain compelling long-term attractions.' Ravelas said that looking ahead, FDI flows are likely to remain uneven in the near term as global uncertainty persists.