PHILIPPINES Trends and Developments Contributed by: Patricia A. O. Bunye, Aida Araceli G. Roxas-Rivera and Christianne Grace F. Salonga, Cruz Marcelo & Tenefrancia
Legal Framework and Investment Landscape in the Philippines Introduction The Philippines has emerged as one of South-East Asia’s dynamic investment destinations, driven by a sustained programme of economic liberalisation, infrastructure modernisation, energy transition, and digital transformation. Over the past several years, the government has undertaken a series of legisla - tive and regulatory reforms designed to enhance the country’s competitiveness within the ASEAN region and position it as a strategic destination for foreign direct investment. These reforms have coincided with broader geopo - litical and economic developments that continue to reshape global investment flows. As multinational corporations reassess supply chains, and diversify manufacturing locations, the Philippines has increas - ingly attracted attention as an alternative investment hub. The country’s large domestic market, strategic location, English-speaking workforce, and expanding middle class provide compelling fundamentals for long-term growth. The Philippines also benefits from strong demograph - ic advantages. With a population exceeding 110 mil - lion and a young, digitally connected labour force, the country offers both a substantial consumer market and a competitive talent pool for regional operations. At the same time, the government’s continued focus on infrastructure development, energy security and digital connectivity has significantly improved the investment environment. Most significantly, the Philippines has moved away from the traditionally restrictive approach that char - acterised many sectors of its economy for decades. Recent reforms have opened key industries to greater foreign participation, reduced regulatory barriers, and introduced a more commercially oriented framework for cross-border investment. The Philippines is also beginning to position itself within the rapidly evolving artificial intelligence (AI) and digital infrastructure landscape. Policymakers have expressed growing interest in developing domestic AI capabilities, strengthening cloud and computing infra -
structure, and supporting technology-driven innova - tion. While many of these initiatives remain at an early stage, they reflect a broader policy direction towards enhancing the country’s role in the regional digital economy and attracting investment into technology infrastructure, data services and advanced computing capabilities. As a result, the Philippine investment landscape in 2026 is defined not merely by market size and growth potential, but by a broader transformation towards liberalisation and integration with regional and global markets. The Philippines’ shift towards investment liberalisation The central feature of the Philippines’ current invest - ment story is its deliberate shift towards investment liberalisation. Long regarded as one of the more restrictive jurisdictions in South-East Asia with respect to foreign ownership, the country has undertaken a series of reforms aimed at expanding foreign participa - tion in strategic sectors while maintaining safeguards for areas considered critical to national interest. One of the most important reforms has been the amendment of the Public Service Act (PSA). Histori - cally, an expansive interpretation of the constitutional concept of public utilities subjected numerous indus - tries to a 40% foreign equity limitation. This frame - work constrained foreign participation in sectors that in many jurisdictions are open to international invest - ment. The amended PSA fundamentally altered this land - scape by narrowing the definition of public utilities to a limited category of essential monopoly services. As a result, several industries previously subject to for - eign ownership restrictions, including telecommunica - tions, airports, railways, tollways, expressways and domestic shipping, may accommodate greater levels of foreign ownership, subject to applicable regulatory requirements and national security safeguards. The reform significantly expanded foreign participa - tion opportunities in infrastructure, transport, logistics and communications sectors. It has also created new possibilities for mergers and acquisitions, public-pri -
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