Philippines Falls In 2026 FDI Confidence Index
Things are looking bad for the Philippines as the nation declined in the 2026 Foreign Direct Investment (FDI) Confidence Index ending up 18th out of the 25 emerging markets, according to a news report by BusinessWorld. It should be remembered that the Philippines attracted less than $8 billion FDI in 2025.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE PHILIPPINES dropped two spots to 18th out of 25 emerging markets in the 2026 Foreign Direct Investment (FDI) Confidence Index by global management consulting firm Kearney.
The Philippines posted a score of 1.4635 in the index, which ranks markets that are likely to attract the most FDI in the next three years.
This was the third straight year the Philippines’ ranking declined in the index. It ranked 16th in 2025, 13th in 2024 and 12th in 2023.
“The index reflects a three-year outlook, so the shift points to softer medium-term investor confidence, rather than any single short-term factor,” Kearney Senior Partner, Philippines Country Head & APAC Communications, Media & Technology Lead Marco de la Rosa said in an e-mail interview.
“At the same time, recent Philippine-specific developments, including headlines last year around infrastructure spending and political challenges, may have weighed on investor sentiment, alongside a more risk-sensitive global environment, making the country a relatively less attractive destination for FDI,” he added.
The Philippines was rocked by a corruption scandal last year that linked government officials, lawmakers, and public contractors to anomalous flood control projects.
In 2025, the Philippines saw its FDI net inflows drop 17.1% year on year to $7.791 billion. This was the lowest yearly FDI level since 2020.
The downtrend continued at the start of this year as January FDI net inflows slid to a four‑month low of $443 million, 39.2% lower compared with the same month a year ago.
Conducted in January 2026, the FDI Confidence Index uses primary data from a proprietary survey of 507 senior executives of the world’s top corporations.
“China, the United Arab Emirates, and Saudi Arabia lead the emerging market ranking for the third consecutive year,” Kearney said.
Among emerging markets, the Philippines fell behind regional peers such as Thailand (6th), Malaysia (7th), Indonesia (13th) and Vietnam (16th).
“Other ASEAN (Association of Southeast Asian Nations) markets have become more attractive, particularly those benefiting from supply chain shifts and stronger positioning in innovation,” Mr. de la Rosa said. “Thailand and Malaysia are benefiting from China+1 diversification, while Vietnam stands out for linking talent to a clear sector strategy, particularly in semiconductors.”
Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes said that the steady decline in the index is not driven by a single factor but rather by the Philippines’ relative underperformance versus peers and persistent structural constraints.
“The index is relative, so even if the Philippines is stable, (the fact) that other countries are rising faster pushes it down,” he said in a Facebook Messenger chat.
According to Kearney, investors cited the Philippines’ labor talent as its strongest asset (32%), followed by natural resources (28%) and economic performance (27%).
A fourth of the investors have identified the country’s tech innovation and ease of doing business as top reasons for investments, while 22% cited transparent governance. Only 12% cited infrastructure quality.
However, a small percentage or 2% said that there were no strong reasons at all to invest in the Philippines.
“What it suggests is that, for a small group of investors, the Philippines’ strengths may not yet be coming through as distinctly as some peers,” Mr. de la Rosa said.
Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the Philippines can bounce back strongly on FDI soon? Do you think the Philippines is becoming the economic weakling of Southeast Asia?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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