Q2 foreign investment pledges surge

MANILA, 14 AUGUST 2026 —

Foreign Investment Pledges in Philippines Hit Near Two-Year High in Q2 Despite Economic Slowdown

Foreign commitments approved by the country’s investment promotion agencies (IPAs) rose 68.22% year-on-year to P115.2 billion in the April-to-June period, up from P68.48 billion in the same period last year. This marked the highest quarterly total since P148.94 billion recorded in the third quarter of 2024. Quarter-on-quarter, approved pledges more than doubled from P54.78 billion in the first quarter of 2026.

The Netherlands led with P50.74 billion in commitments, accounting for 44% of the total, followed by Germany at P18.05 billion (15.7%) and Singapore at P9.95 billion (8.6%). The surge reflects sustained investor confidence in the Philippines’ long-term economic potential, according to Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co.

“This shows that investors are still willing to bet on the Philippines’ long-term growth story,” Ravelas said in a Viber message.

The strong investment approvals came despite a weaker-than-expected second-quarter GDP growth of 2.3%, the slowest since the pandemic, as rising Middle East tensions and lingering effects of last year’s corruption scandal weighed on activity. For the first half of 2026, GDP expanded by just 2.6%, falling short of the government’s 3.5%–4.5% target for 2026.

Eight of the 16 IPAs approved investments in Q2, with the Philippine Economic Zone Authority (PEZA) dominating at P79.16 billion, or 68.71% of the total. The Bases Conversion and Development Authority (BCDA) followed with P22.28 billion (19.34%), while the Board of Investments (BoI) approved P9.28 billion (8.1%). Other agencies, including Clark Development Corp. (CDC) and Subic Bay Metropolitan Authority (SBMA), recorded smaller shares.

Manufacturing dominated approved investments at 68.4% (P78.71 billion), followed by electricity, gas, and steam supply (P8.81 billion, 7.7%) and mining and quarrying (P5.8 billion, 5%). Geographically, the Cordillera Administrative Region led with 48.4% (P55.74 billion), followed by Central Luzon (32%, P36.81 billion) and Calabarzon (12.8%, P14.75 billion).

Total approved investments, including domestic and foreign, reached P541.51 billion in Q2, a 73.1% increase from P312.87 billion in the same period last year. However, job creation from these projects is expected to decline by 21.9% to 32,167 positions, with 27,266 roles tied to foreign-backed ventures.

For the first six months, foreign investment approvals rose 76.18% to P169.98 billion from P96.48 billion a year earlier. PEZA remained the top recipient with P99.12 billion, followed by BCDA (P28.48 billion) and BoI (P14.52 billion).

Economists caution that the surge in pledges may not immediately translate to broad-based job growth. Leonardo A. Lanzona, economics professor at Ateneo de Manila University, noted that the increase is driven by large, capital-intensive projects rather than a widespread recovery in investor sentiment.

“Foreign investment pledges will likely keep growing on paper, but that growth is being driven by a handful of large, capital-intensive projects rather than a broad recovery in investor confidence,” Lanzona said in a Facebook Messenger chat.

The Philippines’ investment momentum contrasts with its sluggish GDP performance, highlighting the role of targeted economic zones and sector-specific incentives in attracting capital. With geopolitical tensions persisting and domestic growth lagging, policymakers face the challenge of ensuring that approved investments translate into sustainable economic gains.

Related: Manila