91视频

Recent legislative and regulatory initiatives have strengthened the Philippines’ investment framework, supporting increased M&A activity and foreign investor participation. Changes to foreign investment rules, tax incentives and capital requirements are influencing how investors evaluate opportunities, structure transactions and allocate risk. This article outlines the key reforms and their implications for dealmaking in the Philippines.

Philippines liberalises foreign investment rules

Foreign investment liberalisation. Recent reforms to the foreign investment regime have expanded opportunities across sectors in the Philippines. Amendments to the Public Service Act (Republic Act No. 11659) relaxed foreign ownership restrictions by narrowing the scope of activities classified as “public utilities”, permitting up to 100% foreign ownership in sectors such as telecommunications, airlines, railways, subways, shipping and tollways.

Reforms to the Foreign Investments Act of 1991 and the Retail Trade Liberalisation Act also expanded foreign investment opportunities by easing market-entry requirements and reducing investment thresholds in selected sectors. Republic Act No. 11647 amended the Foreign Investments Act by reducing the minimum paid-in capital requirement for foreign-owned domestic market enterprises from USD200,000 to USD100,000 and by introducing lower capital thresholds for enterprises that employ advanced technology or maintain a significant Filipino workforce. These reforms expanded foreign investment opportunities in growth-oriented businesses, including technology-driven enterprises and startups that were unable to meet the applicable capitalisation requirements.

In parallel, Republic Act No. 11595 amended the Retail Trade Liberalisation Act by reducing the minimum paid-up capital requirement for foreign-owned retail enterprises from USD2.5 million to PHP25 million (USD405,000), and removing the minimum net worth and global store track record requirements previously applicable to foreign retailers. These reforms lowered barriers to market entry and broadened foreign investment opportunities, particularly in consumer-facing and retail-related businesses.

From a dealmaking perspective, these reforms reflect a broader policy shift towards increasing the Philippine market’s accessibility to foreign capital. By lowering capitalisation thresholds and simplifying entry requirements, the amendments have expanded the range of businesses capable of attracting foreign investment and have increased the viability of transactions involving mid-market and growth-stage companies.

Green energy as a deal magnet. The renewable energy sector has emerged as a key beneficiary of recent investment liberalisation measures. Under the Department of Energy’s Philippine Energy Plan, the government aims to increase the share of renewable energy in the country’s power generation mix to 35% by 2030 and 50% by 2040, while the Green Energy Auction Programme seeks to facilitate the development of 25GW of additional renewable energy capacity by 2035. These policy initiatives underscore the Philippines’ long-term commitment to energy transition and are expected to drive continued investment in the sector.

Investor interest has been further supported by regulatory developments permitting up to 100% foreign ownership of renewable energy projects in solar, wind, hydro and ocean energy resources. In addition, the Energy Virtual One-Stop Shop system has digitised and streamlined the permit process by centralising applications, monitoring, and approvals across relevant government agencies, while Executive Order No. 18 (2023) established green lanes for projects designated as strategically significant investments.

Together, these measures have enhanced regulatory efficiency and the attractiveness of renewable energy assets to strategic investors, infrastructure funds and private capital, driving transaction activity and investment opportunities across the Philippine energy market.

Deal-making checkpoints in Philippine regulation

Competition law as a deal-making checkpoint. The Philippine merger control regime continues to evolve as an important component of the country’s regulatory framework for M&A transactions. Effective March 2026, the size-of-party threshold is PHP9.1 billion, and the size-of-transaction threshold is PHP3.8 billion, with both levels adjusted annually to reflect nominal GDP growth. Transactions that meet the applicable thresholds are subject to mandatory notification and review before completion.

For those under the threshold, the Philippine Competition Commission retains the power to review transactions motu proprio where it has reasonable grounds to suspect anti-competitive effects. These developments reflect the continued maturation of the Philippine merger control regime and reinforce the importance of competition law compliance in both domestic and cross-border transactions.

Tax reforms. The Philippine tax and investment incentives framework has undergone significant reform in recent years, reflecting the government’s efforts to enhance the country’s competitiveness as an investment destination. The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) reduced the corporate income tax rate from 30% to 25% for domestic and resident foreign corporations, and to 20% for qualifying MSMEs, while rationalising the country’s fiscal incentives regime. The CREATE MORE Act further enhanced the incentives framework by expanding available incentives and streamlining administrative processes for registered business enterprises. Together, these reforms seek to improve the Philippines’ competitiveness as an investment destination by reducing tax costs, increasing incentive certainty, and supporting investment in priority sectors.

Environmental, social and governance (ESG). The Securities and Exchange Commission now requires publicly listed and large non-listed companies to comply with the Philippine Financial Reporting Standards on Sustainability Disclosures, and large plastic-waste generators must meet staggered plastic-footprint reduction targets. On the financial side, the BSP’s Sustainable Finance Taxonomy Guidelines require banks to classify and report on sustainability risks across their lending portfolios. For M&A, buyers are increasingly screening targets for ESG and climate-related risks, and treating strong ESG performance as a positive factor in valuation and deal appetite.

Fintech and digital financial services. The continued growth of digital payments and financial technology services has increased investor interest in Philippine fintech businesses, particularly payment platforms, e-wallet operators, digital banks, virtual asset service providers, online lending platforms, and digital financial infrastructure providers. At the same time, evolving regulatory requirements have heightened the importance of licensing and regulatory compliance in M&A transactions in the sector.

Licensing restrictions and moratoriums have further enhanced the strategic value of regulated entities. While the Bangko Sentral ng Pilipinas, the Philippines’ central bank, has reopened applications for digital bank licences on a limited basis, with the number remaining capped, and a moratorium continues to apply to new virtual asset service provider and online lending platform licence applications. As a result, acquisitions and strategic investments have emerged as a key pathway for market entry, contributing to increased M&A activity involving regulated financial services businesses in the Philippines.

Reforms reshape Philippine M&A strategy

Recent reforms reflect a broader shift towards a more open and investment-friendly regulatory environment, particularly in sectors such as renewable energy, infrastructure, technology, financial services, and retail. This impact on M&A is evident in the energy and natural resources sector, which accounted for 29.7% of the total deal volume, followed by consumer and retail at 14.9% and industrials at 12.2%. At the same time, regulators have increased their focus on competition, sustainability, taxation, governance, and sector-specific compliance requirements.

For investors and acquirers, the implications extend beyond market access. Regulatory diligence, licensing analysis, competition assessment and incentive planning are increasingly important components of M&A transaction strategy, influencing valuation, deal structure, execution risk, and post-acquisition integration. As regulatory reforms continue to develop, these considerations are likely to remain central to M&A activity in the Philippines.

Gorriceta Africa Cauton & Saavedra
19F & 15/F Strata 2000
F. Ortigas Jr. Road, Ortigas Center
1605 Pasig City, Philippines
Tel: +632 8696 0687; +632 8696 0988
Email: counselors@gorricetalaw.com