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Net inflows of foreign direct investments (FDI) into the Philippines slumped by 40.5% in August, amid a drop in net investments in debt instruments, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.

Preliminary central bank data showed that net inflows declined by 40.5% year on year to USD 494 million from USD 830 million in the same month in 2024.

This was the lowest amount in two months or since the USD 376 million recorded in June. 

Month on month, FDIs plunged by 61% from USD 1.268 billion in July.

“Net foreign direct investments into the Philippines remained positive in August 2025, with inflows from Japan and into manufacturing taking the lead,” the BSP said in a statement on Monday.

Net investments in debt instruments slumped by 73.8% to USD 145 million in August from USD 553 million a year ago.

These consisted mainly of intercompany borrowing or lending between foreign direct investors and their subsidiaries or affiliates in the Philippines, according to the central bank.

Meanwhile, investments in equity and investment fund shares rose by 26.1% to USD 349 million in August from USD 276 million in the same month last year.

Nonresidents’ net investments in equity capital, excluding reinvestment of earnings, more than doubled to USD 146 million from USD 66 million last year.

Equity placements grew by 53.2% to USD 158 million from USD 103 million a year ago, while withdrawals declined by 66.2% to USD 13 million from USD 37 million a year earlier.

Reinvestment of earnings also slipped by 3.6% to USD 203 million in August from USD 210 million a year ago.

Union Bank of the Philippines (UnionBank) Chief Economist Ruben Carlo O. Asuncion said in a Viber message the lower FDI inflows reflect the impact of external headwinds and domestic investor sentiment.

“The sharp decline in nonresidents’ net investments in debt instruments… was the main drag, suggesting reduced intercompany lending and financing activity amid cautious global conditions,” he added.

Mr. Asuncion said the main factors that contributed to the August slowdown include softening global trade, high US tariffs, geopolitical uncertainty, and tighter global financial conditions.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the US tariffs and other protectionist policies as well as the flood control controversy may have weighed on investor sentiment.

“The series of typhoons from July (to) August could have also weighed on many local economic data, including FDIs, in view of reduced business days caused by these weather-related disruptions on the local economy,” he added in a Viber message.

Eight-month FDI down

In the first eight months of the year, FDI net inflows declined by 22.5% to USD 5.179 billion from USD 6.686 billion in the same period in 2024.

This came as investments in equity and investment fund shares fell by 18.7% to USD 1.786 billion from USD 2.195 billion a year earlier.

Net foreign investments in equity capital other than the reinvestment of earnings likewise dropped by 35.5% to USD 870 million from USD 1.349 billion a year ago.

Placements went down 20.1% to USD 1.364 billion, while withdrawals climbed by 37.6% to USD 494 million.

Nonresidents’ net investments in debt instruments declined by 24.4% to USD 3.393 billion in the eight-month period from USD 4.49 billion the previous year.

“For the first eight months of 2025, equity capital placements were sourced primarily from Japan, the United States, Singapore, and South Korea,” the central bank said.

Most foreign investments went into manufacturing, wholesale and retail trade, and real estate, it added.

“Domestically, while equity placements from Japan, the US, Singapore, and South Korea remained positive — particularly in manufacturing, retail, and real estate — the overall investment climate still faces challenges related to policy clarity, logistical bottlenecks, and execution gaps,” Mr. Asuncion said.

He said FDI net inflows are likely to pick up in the last quarter of the year.

“While this is below trend, we believe the BSP’s USD 7.5-billion full-year target remains achievable, albeit with downside risks,” he said. “The recent uptick in equity placements and reinvested earnings in July and August is encouraging, and we expect some recovery in (the fourth quarter) as sentiment stabilizes and seasonal investment flows pick up.”

Mr. Ricafort also noted that further easing by the central bank could help attract more FDIs into the country.

“Further rate cuts by the Fed and the BSP in the coming months would also make borrowing costs cheaper from the point of view of foreign investors, would helping increase demand for loans to finance more FDIs into the country, both new and expansion projects,” he said.

Since it began its easing cycle in August last year, the central bank has reduced its benchmark policy rate by 175 basis points to a three-year low of 4.75%.

BSP Governor Eli M. Remolona, Jr. earlier said they could deliver another cut later this year and into 2026. The Monetary Board’s last rate-setting meeting this year is on Dec. 11. — Katherine K. Chan

The Philippine economy is expected to accelerate in the fourth quarter, driven by holiday spending, exports, and a rebound in investment activity, Budget Secretary Amenah F. Pangandaman said, but flagged risks from natural disasters.

However, some analysts are skeptical of a fourth-quarter boost as state spending and household consumption are dampened by the corruption scandal.

Ms. Pangandaman, who also chairs the Development Budget Coordination Committee, said the government sees gross domestic product (GDP) growth picking up in the final stretch of 2025.

“(This will be) driven by private holiday spending and supported by government programs, as well as growth in exports and capital outlays,” she told BusinessWorld in a Viber message on Monday.

The economy slowed to 4% in the third quarter from the 5.5% expansion in the second quarter and 5.2% a year ago. This came as the corruption scandal stalled public construction and dampened consumer and investor sentiment.

For the first nine months of the year, GDP growth averaged 5%, slower than 5.9% in the same period last year.

Ms. Pangandaman said she anticipates a rebound in gross capital formation, the investment component of the economy, in the fourth quarter, after it contracted by 2.8% in the third quarter.

“Private investments would be supported by favorable market conditions given lower interest rates, greater liquidity and availability of credit, and seasonal increases in demand for goods and services during the holidays,” the Department of Budget and Management (DBM) chief said.

Since August 2024, the Bangko Sentral ng Pilipinas has reduced its benchmark rate by 175 basis points (bps), bringing it to a three-year low of 4.75%.

At the same time, Fitch Solutions’ BMI said fourth-quarter growth may be driven by remittances and recovery from the recent spate of typhoons.

“We expect the recovery from storm season and strong remittances to drive faster growth in Q4, although tariff-related headwinds will drag on growth,” it said on Monday.

BMI also expects household consumption to pick up in the October-to-December period thanks to stronger remittances driven by a weaker peso and the frontloading of transfers ahead of the US 1% remittance tax starting January 2026.

The US will start imposing on Jan. 1, 2026 a 1% excise tax on cash-based remittances from US senders to recipients abroad.

However, BMI said this boost in remittances is expected to be temporary and will likely lead to a slowdown in 2026.

“Academic research has found that [for] every 1% increase in the cost of sending remittances, the amount remitted falls by around 1.6%. Remittances, therefore, are likely to drag on consumption growth into 2026, diminishing the positive effects of easier monetary policy,” it said.

BMI lowered its GDP growth forecast to 4.9% for 2025, but kept its 5.2% projection in 2026.

“The risks to our forecasts are tilted to the downside. The drag on government spending from the corruption probe could last beyond Q1 2026, particularly if sectors other than flood control are implicated,” it said, adding that slow remittance growth and tariff uncertainty will also remain key headwinds in 2026.

Meanwhile, Nomura Global Markets Research said it expects Philippine GDP growth to slide below 4% in the fourth quarter, citing “still-weak sequential momentum.”

“We believe the drag from the graft scandal in Q3 is just the start, with fiscal spending likely to worsen in the next three to four months. In addition, we continue to incorporate some spillovers on other components of domestic demand… broadening from household consumption to private investment spending,” Nomura said in a report on Monday.

“Our forecasts also continue to take into account the impact of the US tariffs, which pose significant headwinds to goods exports.”

Economy Secretary Arsenio M. Balisacan earlier said the economy must grow by at least 6.9% to hit the low end of the government’s 5.5%-6.5% full-year goal.

Nomura kept its full-year growth forecast at 4.7%, down from last year’s 5.7% and below the government’s target range. If realized, this would mark the slowest pace since the pandemic and trail regional peers like Indonesia.

For his part, IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa said there’s “little reason” to expect the economy to grow by nearly 7% in the fourth quarter, citing weak consumption, exports, and restrained public spending.

“There are no possible sources of any spending spurges — since 2023, household consumption has been weakening since the waning of the post-long lockdown rebound and likewise with exports because of high global uncertainty,” he told BusinessWorld in a Viber message.

“Government infrastructure spending is also unlikely to spike in the last quarter as officials avoid creating further paper trails from corruption-ridden and -vulnerable projects,” he added.

Mr. Africa said the government should stop obsessing with GDP growth targets and instead give “genuine attention to the quality of growth and whether this creates decent employment, raises wages, reduces poverty, reflects improving food security, and improves ecological resilience.” — Aubrey Rose A. Inosante, Reporter

The Department of Trade and Industry (DTI) released its price guide for items typically consumed during the traditional Christmas feast, which reflected increases for 95 food items.

“Of the 256 holiday food items across 14 categories, 129 retained their prices, while 95 posted minimal increases due to higher costs of ingredients, packaging, and labor,” the DT said in a statement accompanying the 2025 Noche Buena price guide.

The price guide lists suggested retail prices for supermarkets and groceries and will be in effect until Dec. 31.

Prices rose for some ham products in the guide, but most prices were maintained, the DTI said.

Prices of two stock-keeping units (SKUs) of fruit cocktail held steady, while prices were adjusted for five others.

Meanwhile, prices held steady for only one of the 12 spaghetti sauce items, while two of the 15 tomato sauce SKUs were also maintained.

This year, the list included new items such as nata de coco and kaong, which the department said reflects the growing demand for dessert ingredients.

“Meanwhile, DTI also secured price rollbacks on six items after consultations with manufacturers,” it added.

These include 500-gram CDO American Style Ham, which saw a four-peso rollback to PHP 170; 800-gram and 1-kilogram King Sue Piña Ham, which had a PHP 7 and PHP 6 price decrease to PHP 520 and PHP 637, respectively; and 800-gram King Sue Sweet, which is one peso cheaper at PHP 449.

The price of 500-gram Danes Queso de Bola, a type of Edam cheese, saw a PHP 10 rollback to PHP 300, while 500-gram Sunshine Sweet Style Spaghetti Sauce had a P3.5 decrease to PHP 48.50.

“With these adjustments, four ham products reverted to their 2024 prices, while select queso de bola and spaghetti sauce will now be sold at prices even lower than last year,” DTI said.

Trade Secretary Ma. Cristina A. Roque said the DTI “continues to carry out the President’s call to keep basic necessities and price commodities and holiday goods within reach of families.” – Justine Irish DP Table

Philexport calls for more export promotion funding

The national government should allocate more funds to export promotion and micro, small, and medium enterprise (MSME) development, the Philippine Exporters Confederation, Inc. (Philexport) said.

In a statement sent over the weekend, Philexport President Sergio R. Ortiz-Luis Jr. urged the Marcos government not to reduce public spending in the wake of the corruption issues around flood control projects.

Instead, he said that the government should “allocate more funds where they are badly needed, like export promotion and MSME development—two key sectors that can help revive the country’s slowing economy.”

He described the cutting down on government spending as “unwise,” noting that the money spent on flood control projects did not go where it was intended for.

“The government spending that was cut was probably the ones that were lost to floods anyway, so they don’t really go to the economy,” he said.

“We are hoping that [much] of this budget that was lost may go to… export as an investment—because we have not been investing in export—and to the SMEs,” he added. — Justine Irish D.  Tabile

The Philippines’ unemployment rate rose to 3.8% in September from a year earlier, signaling a fragile labor recovery as natural disasters disrupted hiring ahead of the holiday season, data from the Philippine Statistics Authority (PSA) showed on Thursday.

About 1.96 million Filipinos were jobless during the month, up from 1.89 million a year earlier, when the jobless rate was 3.7%, National Statistician Claire Dennis S. Mapa told a news briefing, citing the impact of typhoons and earthquakes on employment.

Despite this, Labor Secretary Bienvenido E. Laguesma told BusinessWorld that he is “hopeful” the upcoming holiday period will spur hiring activity.

The latest jobless rate was an improvement from August’s 3.9%, when 2.03 million were out of work.

Employment stood at 49.6 million in September, slightly below September 2024’s 49.87 million.

“[Holiday hiring] usually starts in the month of September, but the pickup typically happens in the fourth quarter,” Mr. Mapa said in Filipino, noting the October results will show if hiring activity indeed picked up.

“There’s a substantial seasonality component during the fourth quarter,” he added.

For the first nine months, joblessness stood at 4.1%, a tad higher compared to the same period last year of 4%.

The other service activities industry posted the largest drop in employment annually, shedding 493,000 workers, followed by administrative and support service activities (-356,000), manufacturing (-302,000), transportation and storage (-233,000), and public administration and defense and compulsory social security (-220,000).

On a monthly basis, the other service activity industries lost 498,000 workers, followed by construction (-308,000), transportation and storage (-247,000), and financial and insurance activities (-105,000).

Explaining the almost half-a-million month-on-month drop in the other service activities sector, Mr. Mapa said this might be tied to household income.

“I can surmise that this is possibly related to household income,” he said in Filipino, noting that during the first and second quarters of the year, there was a substantial increase in domestic services. “Usually, when the income is a bit higher, this number also tends to be higher.”

For the job losses in the manufacturing industry, Mr. Mapa said this may be due to global trade uncertainty.

Job losses were seen in the areas of ready-made embroidered garments manufacturing, manufacture of electronic walls and tubes, and manufacturing of parts and accessories for motor vehicles.

Mr. Mapa noted that the manufacturing sector saw jobs decline by around 208,000 workers in the first nine months of the year.

“It’s possible that this is linked to our exports, since most of our manufacturing companies export their products — and we’re currently facing problems in global trade,” he said.

In August, the US began imposing a 19% tariff on most Philippine-made goods.

Meanwhile, employment rate stood at 96.2% in September, a tad lower than 96.3% in the same period last year.

This means 49.6 million Filipinos had jobs in September, which was lower compared to 49.87 million last year.

For the first nine months of 2025, the employment rate averaged at 95.9%, slightly lower than last year’s 96%.

The construction industry had the most job gains in September, adding 514,000 employees, followed by fishing and aquaculture (+313,000), accommodation and food service activities (+307,000), human health and social work activities (+183,000), and agriculture and forestry (+126,000).

Craft and related trades workers added 280,000 workers annually, while elementary occupations added 119,000 jobs.

Compared to August 2025, 280,000 managerial jobs were added in September, followed by clerical support workers (+138,000) and technicians and associate professionals (+104,000).

Underemployment

Job quality strengthened year on year as the underemployment rate — the share of workers seeking more hours or jobs — eased to 11.1% from 11.9% a year ago. However, it worsened from 10.7% in August due to slower activity in construction.

The labor force participation rate slipped to 64.5% in September from 65.7% a year earlier, translating to 208,000 fewer people in the workforce, the PSA reported.

Roughly 572,000 workers also left the labor force month on month.

Employment in the Philippines’ construction industry increased in September, but many workers were unable to work full-time as underemployment rose, according to Mr. Mapa.

Mr. Mapa said the impact of ongoing investigations into anomalous flood control projects is not yet fully reflected in labor force data. He noted government spending and project disbursements are captured in the gross domestic product report, which will be released on Friday.

“What we’re seeing in the labor force data is an increase in workers in the construction industry. Year-on-year — from January to September — there was a slight increase. However, we also observed a rise in underemployment,” Mr. Mapa told reporters after the briefing in mixed English and Filipino.

“When underemployment increases, it means that not all workers in that industry were able to work full-time, say 40 hours a week; some may have only worked on specific days or for fewer hours.”

Outlook

In a note, Chinabank Research said September jobs data suggest the labor market remains “robust.”

“This fourth quarter, we could see better employment numbers, driven by an expected increase in demand as the holidays approach, though weather-related disruptions and external challenges could temper these gains,” it said.

Chinabank said there may be a seasonal boost in employment during the holidays, particularly in retail and tourism-related sectors like accommodation and food services.

“Potentially softer external demand amid steep US tariffs remains a risk to manufacturing activity and jobs. Additionally, weather disturbances and calamities could lead to job losses in affected areas,” it said.

University of the Philippines Diliman School of Labor and Industrial Relations Assistant Professor Benjamin B. Velasco warned that the Philippine labor market is suffering from a “double whammy” of climate impact and corruption.

“More Filipinos out of work due to natural disasters and the flood control ban, not just year on year but also month on month. If we add the half million who left the work force to the 1.96 million who are technically unemployed, that is much more than the 2.03 officially jobless in August,” he said via Messenger.

Mr. Velasco warned that the ongoing political and environmental crises will prolong the labor slump unless the government takes deliberate action.

“If the private sector is not providing enough jobs, then the government must take up the slack.” — Chloe Mari A. Hufana, Reporter

The government is betting that its PHP 1.31-trillion programmed spending for the fourth quarter will lift full-year economic growth this year, Budget Secretary Amenah F. Pangandaman said on Thursday.

The Department of Budget and Management (DBM) has programmed PHP 1.31 trillion for disbursement during the October-to-December period.

“Our programmed spending for the fourth quarter will boost year-end economic growth and thus impact overall economic growth for the year,” Ms. Pangandaman, who also serves as the Development Budget Coordination Committee chairperson said.

In the first six months of 2025, the gross domestic product grew by 5.4%, slightly below the government’s 5.5% to 6.5% growth goal. 

The third-quarter data will be released on Nov. 7.

However, the economy faces a possible slowdown as government spending is affected by a widening corruption scandal.

Ms. Pangandaman has said the slowdown in public infrastructure spending is temporary, with spending expected to “catch up” in the remaining months of the year.

The bulk of the amount allocated for social services, following President Ferdinand R. Marcos, Jr.’s directive “to ensure that spending for the final stretch of 2025 directly benefits the Filipino people,” the DBM said.

The DBM said PHP 2.74 billion was allotted for the National Disaster Risk Reduction and Management Fund (NDRRMF), which will go to the Quick Response Fund (QRF), as well as emergency cash transfers.

QRFs are built-in budgetary allocations that represent pre-disaster or standby funds for agencies in order to immediately assist areas stricken by catastrophes and crises.

In addition, the DBM released PHP 9.52 billion to the Department of Social Welfare and Development to fund key social protection programs, including the remaining balance for the Pantawid Pamilyang Pilipino Program (4Ps).

It also disbursed PHP 7.03 billion for payouts under the Assistance to Individuals in Crisis Situation (AICS), PHP 5.77 billion for social pensions for indigent senior citizens, and PHP 4.83 billion for the social aid program Ayuda sa Kapos ang Kita (AKAP).

In addition, the Department of Agriculture has been allocated PHP 7.33 billion for the National Rice Program, and PHP 2.47 billion for the National Livestock Program.

“Another PHP 2.29 billion is also available under the National Food Authority for the buffer stocking program and targeted rice distribution program to ensure the availability of rice, especially in case of unforeseen domestic and global headwinds,” it said. 

For the education sector, the DBM released PHP 203.82 billion for the Department of Education for the fourth quarter, with PHP 153.71 billion allocated for benefits and year-end bonus of teachers and personnel. An additional PHP 11.4 billion has been disbursed for the Salary Standardization Law adjustments.

Meanwhile, PHP 23.62 billion is released for the operations of schools, while PHP 32.79 billion is earmarked for government assistance and subsidies.

State Universities and Colleges and the Commission on Higher Education received PHP 31.78 billion, which will fund the implementation of key higher education programs and funding of personnel benefits and requirements.

For the labor sector, the DBM disbursed PHP 4.89 billion for the Department of Labor and Employment’s livelihood and emergency employment programs.

Meanwhile, the healthcare sector received PHP 4.3 billion for the support of operational expenses of hospitals in Metro Manila and PHP 9.96 billion for regional hospitals.

The DBM also released PHP 787.95 million worth of subsidies under the Medical Assistance to Indigent and Financially-Incapacitated Patients and another PHP 179 million for the Cancer Assistance Fund.

In addition, PHP 528.09 million has been earmarked for Department of Migrant Workers’ programs such as the Overseas Filipino Workers Hospital, the Agarang Kalinga at Saklolo para sa mga OFWs na Nangangailan Fund, and the National Reintegration Center for OFWS.

Out of this fund, PHP 321 million has been allotted for the Emergency Repatriation Program of the Overseas Workers Welfare Association.

In a separate statement on Thursday, the Department of Finance said the government will disburse PHP 63.69 billion in year-end bonuses and PHP 9.24 billion in cash gifts to over 1.85 million state employees nationwide.

As of Oct. 27, the DBM has already disbursed PHP 1.133 trillion of Notices of Cash Allocations out of the PHP 1.307-trillion program for the fourth quarter. — Aubrey Rose A. Inosante