Philippines faces economic slowdown amid falling foreign investment

The Philippines is facing a structural economic slowdown as key drivers of its growth engine stall. Recent data shows foreign direct investment (FDI) fell 23.9 percent in the first seven months of the year to $4.07 billion, while cash remittances from overseas workers reached a three-month low in August. The Philippine peso also hit a record low of 63.06 against the US dollar on October 15, and second-quarter GDP growth slumped to 2.3 percent.

Business leader Jaime Augusto Zobel de Ayala has warned that the country risks being left behind in the global race for investment. He identified five critical areas that require urgent attention to remain competitive against other ASEAN nations: talent, infrastructure, energy, the regulatory environment, and institutional stability.

While officials have previously attributed economic fluctuations to global headwinds such as US inflation and Middle East conflicts, analysts suggest deeper issues. Multinational corporations are increasingly cautious due to high interest rates and shifting supply chains, opting for markets with greater policy clarity and more predictable costs.