Assorted plastic products are displayed at a wholesale market in Manila, Philippines, July 10, 2025. Photo: Reuters
Despite being one of Asia's fastest-growing economies, the Philippines trails regional peers in attracting foreign direct investment, held back by red tape, high power costs, and weak infrastructure.
"The private sector is an important engine of growth and job creation. Their role in the country's overall economic development cannot be overstated," said ADB Country Director for the Philippines Andrew Jeffries.
"We are committed to assisting the Philippines in finding innovative ways to create an enabling environment that would spur a more dynamic business sector - one that will help drive faster economic growth."
In the World Bank's inaugural Business Ready 2024 report, which assessed 50 economies, the Philippines ranked 16th in terms of its regulatory framework, 24th in public services, and 36th in operational efficiency, behind most regional peers.
The ADB said the funding program, aimed at enabling investments in sectors such as renewable energy and digital infrastructure, should strengthen legal and regulatory frameworks to make starting and operating a business easier.
Last year, the Philippines attracted $8.9 billion in foreign direct investment, far lower than Malaysia's $11 billion, Indonesia's $24 billion, and Vietnam's $20 billion, according to UNCTAD's ASEAN Investment Report 2025.
The funding support to make it easier to do business comes as the Philippines grapples with a massive corruption scandal surrounding flood-control projects, with billions of pesos allegedly siphoned off substandard or "ghost" infrastructure.
The controversy has implicated public works officials, senators, and congressmen, sparking nationwide protests and constraining infrastructure spending that has weighed on investor confidence and growth.
