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 on Tuesday said net FDI inflows reached USD897 million in November 2025, slightly lower than the USD901 million recorded in the same month in 2024.

Most inflows came from South Korea and were directed to the manufacturing sector.

For the first 11 months of 2025, net FDI totaled USD7.1 billion, down from USD9.1 billion in the same period a year earlier.

Major sources were Japan, the United States, Singapore, and South Korea, with 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.

“For the coming months, improved governance standards and reforms would help improve international investor confidence and sentiment, including for FDIs,” he said.

He added that potential rate cuts by the US Federal Reserve and the BSP could further support investments by lowering borrowing costs, alongside other growth-supporting measures such as monetary easing and fiscal expansion, if policy space allows. (PNA)