Philippines investments poised for reset

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

MANILA, Philippines — After a challenging 2025, the Philippine investment landscape is poised for a reset, even as the country’s main investment promotion agencies (IPAs) have a mixed outlook for this year.

Investors took a cautious stance last year as the country faced a combination of global and domestic headwinds.

The announcement by the United States of sweeping tariffs on its trade partners including the Philippines sent shockwaves to the economy and brought uncertainty.

Locally, corruption issues in the government’s flood control projects, including kickbacks and ghost as well as substandard projects, also weighed on investor sentiment.

This challenging investor environment was reflected in the government’s investment approvals, which slipped by two percent to P1.92 trillion last year from P1.96 trillion in 2024.

These investments are pledges made by firms that are interested to set up or expand operations in the country. These may or may not materialize in the future.

These were approved by IPAs such as the Board of Investments (BOI), Philippine Economic Zone Authority (PEZA), Authority of the Freeport Area of Bataan, Bases Conversion and Development Authority, Bangsamoro BOI, Clark Development Corp., Cagayan Economic Zone Authority, Clark International Airport Corp., John Hay Management Corp., Poro Point Management Corp., Subic Bay Metropolitan Authority, Tourism Infrastructure and Enterprise Authority and the Zamboanga City Special Economic Zone.

Of these IPAs, the BOI accounted for over 80 percent or P1.56 trillion of last year’s total approved investments. The amount was below the P1.75-trillion target set by the agency.

The amount of investments approved by the BOI last year was also four percent lower than the P1.62 trillion approved in 2024.

Lower BOI target

For this year, Trade Secretary and BOI chair Cristina Roque said the agency has set a lower investment registrations target of P1 trillion.

Roque attributed the lower goal to the expected shift in sectors that will drive investment registrations this year.

“In the past three years, registrations were driven mainly by renewable energy (RE) projects,” she said, noting that these undertakings typically require high capital costs, especially offshore wind projects.

She said the BOI expects projects in mineral processing, infrastructure, including digital infrastructure, as well as high-value manufacturing to drive investment registrations this year.

“As these typically have lower investment costs per project than RE, we are therefore targeting a lower BOI registration this year,” she said.

Despite the expected change in sectors that will drive investment registrations this year, she said the BOI would continue to ensure all previously registered projects are realized by helping bring these to full implementation and commercial operations.

PEZA outlook brighter

For PEZA, which accounted for the second biggest share in total approved investments by IPAs last year, the outlook for 2026 is more optimistic.

“I am hopeful that PEZA will achieve its P300-billion investment target this year,” Roque, who also serves as PEZA Board chair, said.

PEZA’s investment approvals target for this year is 15 percent higher than the P261 billion worth of investments approved in 2025.

If the P300-billion goal is realized this year, PEZA director general Tereso Panga said this would bring the agency back to its heyday from 2011 to 2015 when annual investment approvals averaged P290 billion.

Roque said PEZA has seen an upward trajectory in investment approvals since 2022, posting an average annual growth rate of 23 percent.

“For 2026, PEZA investment growth will be driven by manufacturing (60 percent), ecozone development (25 percent) and IT- BPM (information technology – business process management services) (15 percent),” she said.

In terms of expected sources of foreign investments, she cited Japan, the US, United Kingdom, South Korea, Singapore, China and Taiwan.

Panga said PEZA would continue to push for efforts to improve the ease of doing business to sustain investor confidence.

“Anything that has to do with improving ease of doing business, anything that has to do with better governance I think can be a more effective tool in attracting investments,” he said.

Manufacturing reforms

The Federation of Philippine Industries (FPI), which serves as the umbrella organization of manufacturers and producers in the country, is also optimistic on manufacturing investments this year.

“For the Philippines in 2026, actual FDI (foreign direct investments) in manufacturing will come primarily from the existing pipeline of approved investments in 2022 and 2023 – around $9 billion annually,” FPI policy director Roberto Batungbacal said.

He cited reforms that are expected to drive manufacturing investments in the country.

In particular, he said the CREATE MORE Act provides responsive, performance-based incentives aligned with the Strategic Investment Priority Plan.

Incentives under the CREATE MORE are not limited to foreign investors, but also available to large domestic projects that are classified as high-value domestic enterprises.

Batungbacal also cited the Tatak Pinoy Act, which seeks to encourage the production of sophisticated and globally competitive Philippine products.

He said that the Tatak Pinoy is expected to drive investment toward industries that serve government and domestic demand, while remaining fully open to foreign firms that manufacture locally.

“At the same time, mining reforms and expanding Philippines–US cooperation on critical minerals create a real pathway from raw mineral extraction to downstream manufacturing and value-added production,” he said.

IT-BPM cautious

For the IT and Business Process Association of the Philippines (IBPAP), the group is cautiously optimistic on the IT-BPM industry’s growth for this year as it expects to continue to see challenges in terms of ease of doing business and available talent.

IBPAP president and CEO Jack Madrid said the challenging geopolitical and macroeconomic climate last year affected investor confidence and appetite for expansion and may continue to have an effect this year.

While the Philippines is an attractive location for IT-BPM services, he said more measures are needed to encourage investments.

“We need to make it easier to do business,” he said.

Madrid said the declaration of holidays on very short notice, for instance, makes it difficult for businesses to plan ahead.

Continued upskilling of the workforce is also needed in the IT-BPM sector to continue to adapt to the evolving requirements of work.