PHILIPPINES Trends and Developments Contributed by: Francis L. Fragante, Jennifer Marie G. Castro and Carriz Andrea F. Nana, Cruz Marcelo & Tenefrancia
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The Philippines enters 2026 with renewed policy momentum, establishing itself as one of Southeast Asia’s more actively restructured investment destina - tions. The country’s incentive regime is shifting to a performance-based model, guided by targeted sector priorities under the forthcoming 2026–2028 Strategic Investment Priority Plan (SIPP). Investment-driven tax reforms and recent legislation complement this approach, strengthening capital market efficiency and widening the role of the private sector in infrastructure development. These developments define the operat - ing environment that investors and practitioners must now navigate as the Philippines advances its agenda for strategic, export-oriented, and technology-driven investment, supported by clearer governance stand - ards and sustained fiscal discipline. Investment Trends Fiscal incentives for businesses in the Philippines are no longer handed out as guaranteed privileges. They are now measured and aligned with sectors the government considers most important for economic progress. The current framework places emphasis on incentives that are performance-based and aligned with national development goals, prioritising high- value, export-driven and technology-focused sectors. At the core of this strategy is the SIPP, a three‑year investment roadmap that identifies priority economic activities and sectors that are eligible for fiscal and non‑fiscal incentives. This strategy encourages invest - ment in areas that create more jobs, expand export capacity, modernise domestic industries, or support
environmental and technological resilience. To do this, the plan groups qualified activities into three tiers, with higher tiers typically receiving longer and more significant incentive packages. The SIPP is reviewed and updated periodically to reflect national goals and global industry shifts. The latest SIPP, which shall cover the period between 2026 and 2028, is due to be issued soon. Based on initial reports, Tier I Activities cover Basic Needs & Sustainability which focuses on activities that address modern basic needs and support sustainable growth, including: (i) agriculture, fisheries, and forestry, (ii) manufacturing, (iii) halal, kosher, and organic‑related production, (iv) services (including healthcare and dis - aster risk management), (v) infrastructure and logistics, (vi) energy and utility sectors, (vii) sustainability‑driven initiatives (eg, industrial waste treatment, bulk water supply) and (viii) export‑oriented activities and those covered by special laws. Tier II covers goods or services not yet widely pro - duced in the Philippines, including projects that reduce import reliance in areas tied to national defence, food security and gaps in important indus - trial supply chains. Tier III is reserved for industries that push the bounda - ries of innovation, such as research and development, advanced manufacturing, digital technologies, and facilities that directly support start-ups and innova - tion ecosystems.
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