Corruption to dampen PH FDIs until 2026, says BMI

Corruption issues are projected to continue dampening foreign direct investments (FDIs) in the Philippines until 2026, according to BMI, a unit of Fitch Solutions.

BMI noted that the share of FDIs to the country's economic growth has decreased, falling to 1.3% in the second quarter from a pre-pandemic average of 2.5%.

This corruption concern adds to existing pressures from macroeconomic uncertainty and global trade tensions, further discouraging foreign investment.

President Ferdinand Marcos Jr. highlighted corruption in flood-control projects during his State of the Nation Address, intensifying investor worries.

In August, FDI net inflows saw a significant 40.5% drop, amounting to $494 million compared to $830 million in the same period last year.

The BMI report also anticipates a slowdown in remittance growth by 2026, as the United States is the primary source of these inflows.

Both the Senate and the House of Representatives are investigating alleged irregularities in public works spending, specifically concerning flood control projects where a large portion of the budget reportedly went to a small number of contractors.