What you need to know about investing in the Philippines

Is investing in the Philippines a smart move?

Yes, investing in the Philippines can be a smart move thanks to its growing economy, low costs, and strong outsourcing sector.

• The country sits at the heart of Southeast Asia, a key gateway to the region.
• Low costs and generous incentives make it attractive to foreign investors.
• Investors still face risks like red tape and shifting politics.

Being a developing nation, the Philippines has great potential to grow through foreign and local investments. The government, in turn, encourages these businesses to thrive and keep adding to its economy.

Foreign investment continues to flow at a strong pace. In fact, Goldman Sachs named it one of the next emerging economies in the world. This article covers the investment climate, its upsides, and how foreigners can invest in the Philippines.

Is the Philippines a good country to invest in?

The Philippines is seen as one of the better countries to invest in. Investors, businesses, and experts see real potential here. As a result, the country has shown steady economic growth in recent years.

The Philippines has also earned strong global rankings. For example, in 2018 the US News & World Report named the Philippines as the “best country to invest in,” while CEO Magazine ranked it seventh out of the top 10 best countries in 2020.

Rankings shift from year to year, yet the outlook stays bright. Demand for outsourcing keeps rising, and new investments keep coming. Because of this, the country remains one of the fastest-growing economies in Southeast Asia.

Why invest in the Philippines?

Some foreign investors still weigh the risks before they commit. Even so, the government keeps working to make the country more open to business. So there are clear reasons to invest here.

Strategic location

The Philippines sits at the heart of Southeast Asia. As a result, it is a welcoming gateway to the region. Foreigners can reach nearby provinces and countries in just a few hours. This makes it a key entry point to the ASEAN Free Trade Area market.

An abundance of resources

The Philippines is rich in natural resources. Because of this, its economy has room to stay strong. For instance, the 7,000-island archipelago is full of waters used for fishing and sea trade.

Competitive investment costs

The Philippines has some of the lowest costs in the world. This is true above all in outsourcing, which makes it a worthy place to invest. Its low cost of living shapes local wages, which can start at around $500 per month for rank-and-file staff. For a fuller picture, review the average salary in the Philippines before you plan a budget.

Generous incentives

Foreign businesses also enjoy strong benefits from the government. In particular, agencies like PEZA exist to grant these incentives. As a result, they help boost foreign investment in the Philippines. The Board of Investments also supports investors with more perks.

Better investment security

Compared to India, the Philippines is seen as less risky for investors. This is due to better savings and incentives than in some Asian markets. It also helps that recent laws, such as the Retail Trade Liberalization Act and the Public Services Act, make foreign investment easier.

Overall country brand

Most of all, the Philippines has built a clear brand. It is known as a reliable, leading BPO country. It offers stable infrastructure, low costs, an English-speaking workforce, and a large market for outsourced services.

Investment risks

Despite these upsides, investing in the Philippines still carries risks. Companies should weigh them before they commit. Still, most risks can be managed with good planning.

Geopolitical risks

The Philippines faces several geopolitical issues that can affect foreign investment. For example, red tape can slow down company setup. So filing requirements and paperwork may take time.

Political instability

Shifts in government can also affect investment. When parties clash, one may reverse a policy from a past administration. As a result, this can confuse foreign owners doing business here. Corruption within some agencies can occur as well.

Reliance on foreign investments

The country leans heavily on foreign investment and assets. This shows in both export trade and outsourcing. Luckily, the Philippines is also growing local MSMEs and larger firms. Because of this, it can better compete with multinational companies.

Ease of doing business in the country

In the 2020 World Bank Report on Doing Business, the Philippines ranked 95th out of 190 countries. That was a jump of 29 spots from 124th a year earlier.

Doing business here is now far easier than it was a decade ago. There is still room to improve, yet several laws have set a stronger base. As a result, processes are more digital and open, even for small firms. To get started, read this guide to doing business in the Philippines.

• EODB Law. In 2018, the Ease of Doing Business and Efficient Government Service Delivery (EODB-EGSD) Act was passed. It aims to speed up government processes and cut red tape.
• TRAIN Law. Known as the Tax Reform for Acceleration and Inclusion Act, the TRAIN Law cut tax payments and steps for people and businesses of all sizes.
• CREATE Law. The Comprehensive Recovery and Tax Incentives for Enterprises (CREATE) Law, meanwhile, gives stimulus measures to help businesses grow and reinvest.

3 ways to start investing in the Philippines

Investing in the Philippines has its challenges, yet it is far from impossible. There are many ways for firms of all sizes to gain from the country. So here are three ways to start.

Purchasing exchange-traded funds (ETFs)

Exchange-traded funds (ETFs) are diversified securities that group several assets in one. An ETF can hold stocks, bonds, and mutual funds bundled into a single offering in the stock market.

Buying ETFs is the easiest way to invest in the country. Like stocks, you can buy them through a regular broker at a low cost. In addition, they offer instant diversification for more security.

Starting a business

Foreigners can also start a business in the Philippines. However, they must study which sectors they can fully or partly own. The Foreign Investments Act (FIA) of 1991 made this possible.

Foreigners can own up to 100% of a company in many sectors. The main exceptions sit in negative lists A and B. First, negative list A covers activities reserved for Filipinos by law. Companies in this list include:

• Mass media (except internet business and recording)
• Small-scale mining
• Security and surveillance agencies
• Retail trade
• Practice of professions

In some cases, sectors in this list allow up to 60% foreign ownership. Next, negative list B caps ownership at 40% for health, security, and moral reasons. It also aims to protect small and medium local industries. To register properly, follow this guide to business registration in the Philippines.

Business process outsourcing

Finally, foreigners with existing businesses can outsource work. They can delegate a task, a project, or a full department. Business process outsourcing in the country does more than help global firms.

It also creates jobs and boosts income for Filipinos. As a result, it lifts living standards across the country. Outsourcing here has grown for decades, and the Philippines BPO industry now stands among the world’s largest.

Frequently asked questions

Can foreigners invest in the Philippines?

Yes, foreigners can invest in the Philippines. They can buy ETFs, start a business, or outsource work. Some sectors, though, limit how much a foreigner can own.

What are the main benefits of investing in the Philippines?

The country offers low costs and a strong outsourcing sector. It also has a large, English-speaking workforce. In addition, the government grants clear incentives to investors.

What risks come with investing in the Philippines?

Key risks include red tape and shifting politics. Reliance on foreign investment can add pressure too. Still, good planning helps you manage most of these.

How much foreign ownership is allowed?

Foreigners can own up to 100% of a firm in many sectors. Negative list A and B set the main limits, though. Some fields cap foreign ownership at 40% or 60%.

Is the Philippines still attracting foreign investment?

Yes, foreign investment keeps flowing into the country. Net inflows reached about $7.8 billion in 2025. Manufacturing, trade, and finance drew much of that capital.

Key takeaways

• Investing in the Philippines offers low costs, incentives, and a strong outsourcing base.
• Its location makes it a key gateway to the ASEAN market.
• Foreigners can invest through ETFs, a new business, or outsourcing.
• Ownership limits apply in some sectors under negative lists A and B.
• Weigh risks like red tape and politics, then plan around them.