Six changes making the Philippines more attractive

#1. CREATE MORE is changing the investment equation

The CREATE MORE Act has expanded and refined the Philippines’ fiscal-incentive system while giving investors greater clarity over tax incentives and qualifying activities.

The government is pairing CREATE MORE with the 2026-2028 Strategic Investment Priority Plan, which prioritizes advanced manufacturing, critical minerals and green metals, renewable and emerging energy technologies, artificial intelligence, data science, cybersecurity, quantum technologies and other future industries.

For European manufacturers facing higher costs and geopolitical supply-chain risks, that matters because the Philippines is increasingly trying to compete for production capacity rather than simply service-sector jobs.

#2. The ARROW Act tackles one of infrastructure’s biggest bottlenecks

The Accelerated and Reformed Right-of-Way Act, or ARROW Act, is designed to speed up land acquisition and right-of-way procedures for major infrastructure projects.

Right-of-way delays have historically held back Philippine infrastructure. The new framework establishes clearer acquisition and compensation rules and provides mechanisms intended to reduce delays, including for qualified private-sector infrastructure projects.

That could be particularly important for factories, power projects, railways, ports and logistics facilities whose economics depend on reliable connections.

#3. Foreign investors can now lease land for up to 99 years

The Philippines still does not allow foreigners to own private land, but Republic Act 12252, signed in 2025, extended the maximum lease period for foreign investors to 99 years, replacing the previous 50-year term plus a 25-year renewal.

That is significant for capital-intensive projects such as factories, industrial parks, processing facilities and logistics hubs, where investors need decades to recover large upfront investments.

#4. Economic zones are becoming a manufacturing platform

The Philippines is expanding its network of PEZA economic zones and other freeport and special economic zones, offering investors infrastructure and incentive packages while connecting factories to export markets.

PEZA approved 216.46 billion pesos in investments covering 196 projects through August 2026, already reaching 72% of its full-year target. Manufacturing accounted for 80 projects, the largest category. Most projects were in Luzon, while Dutch companies were among the largest foreign investor groups.

That is increasingly important as multinational companies seek alternatives and additional production locations outside China.

#5. The Luzon Economic Corridor (LEC) is turning geography into an investment advantage

The Philippines, United States and Japan are developing the Luzon Economic Corridor, linking Subic Bay, Clark, Manila and Batangas.

#6. Manila is trying to reduce the security risk in areas once affected by insurgency

The Philippines is also trying to convert long-running security problems into a development opportunity.

The government has expanded its amnesty and reintegration program for former communist rebels while the National Task Force to End Local Communist Armed Conflict is pushing development funding, infrastructure and governance programs in conflict-affected communities.

More than 16,000 former rebels and combatants had availed themselves of the national amnesty program by March 2026, while the government has proposed extending the program for another two years.

The objective is not simply military: the government says roads, schools, livelihoods, social services and economic activity are part of the strategy to address the roots of the decades-old insurgency.

For investors, sustained improvements in security and connectivity can open locations outside the traditional Metro Manila-Luzon industrial core.

Infrastructure is becoming part of the investment pitch

The Philippines’ infrastructure build-up is occurring alongside these reforms.

The government’s “Build Better More” program encompasses hundreds of infrastructure projects covering transport, energy, water, digital infrastructure and other sectors.

Domestic market: Key attraction

European manufacturers do not have to view the Philippines solely as an export platform.

Household consumption accounts for more than two-thirds of Philippine economic activity, according to recent national accounts data.

Growth has slowed — household spending rose 2.8% year-on-year in the second quarter of 2026 — but the size of the consumer market remains a major attraction.

That creates a different proposition from smaller Southeast Asian economies: a company can potentially manufacture locally, sell locally and export regionally.

Europe is looking beyond the Philippines’ traditional strengths

The Philippines has long been associated with business-process outsourcing, electronics assembly and overseas-worker remittances.

The emerging investment story is broader.

PEZA said more than 190 companies with European equity already operate in its zones, representing more than 400 billion pesos in cumulative investments and more than 430,000 jobs.

The Philippines and EU are also negotiating a free trade agreement. The sixth round of negotiations was held in Manila in May 2026, with both sides seeking deeper market access and investment ties.