Investment Opportunities in the Philippines to Take Advantage of Economic Growth

As the year comes to a close, it is again time to plan out next year’s strategies, and that includes investments.

In the Philippines, the continued economic growth and corporate recovery offer a range of opportunities for local and foreign investors alike.

Economic projections for 2024

Though the Asian Development Bank (ADB) slashed its 2023 growth projections for the Philippines from 6 percent to 5.7, it remains strong amid inflation and other global pressures.

Moreover, ADB maintains a 6.2 percent gross domestic product forecast for 2024, which is a promising outlook for investors. This is all attributed to household consumption, infrastructure spending, and social services.

In addition, the Philippine government is pushing for a more lenient entry of foreign investments and different investors in the country to sustain this growth and create more jobs.

This is supported by its recent efforts to update the Retail Trade Liberalization Act of 2000 and the Foreign Investments Act of 1991.

These factors, coupled with growing market along with the Philippines’ young, educated workforce, provide a promising environment for the growing economy.

Given these conditions, the wise thing to do now is to conduct due diligence for more informed decisions before making any investment decisions, then venture into stable and growing industries and take advantage of these projections to minimize risk.

What are the most promising industries to invest in the Philippines?

For those who are looking for potential ventures to buff up their investment strategy and make more money to reach financial goals for the next year, below are the industries to watch:

Business Process Outsourcing (BPO) and Digital Infrastructure

The Philippines is one of the leading centers for business process outsourcing (BPO) in the world. It is especially appealing to foreign investors because of the skilled English-speaking workforce, robust infrastructure, and cost-efficient system in place.

As it continues to grow, BPOs need support from other industries, especially from the technology field.

This opens up opportunities for internet providers, consultancy and training services, and other software and hardware providers that BPOs need.

BPOs also bring in more opportunities for real estate as companies need more office spaces to operate.

Along with this is the demand for rental and permanent living spaces for its employees. Over time, this can usher in value appreciation and higher price for properties around the area.

Growth in BPO and other sectors ultimately depends on a reliable digital infrastructure. Accordingly, the Philippines’ digital economy is one of the fastest-growing in Southeast Asia. With consistent local and foreign investment inflows, it could grow into a $40-billion market in 2025.

To benefit from the high profits and growth in this sector, consider investing in publicly traded telecommunication companies in the Philippines.

Consider putting stakes in ventures that build and maintain the digital infrastructure, including fiber-optic networks and mobile networks.

Renewable Energy and Electronics Industry

The Philippines has recently lowered the barriers to entry of renewable energy investments in the country. Under the new Department of Energy Circular, the previous restriction that only allows companies with 60% Filipino ownership to operate has been lifted.

This is to speed up renewable energy projects and help the country reach its target of 30% renewable energy in the power generation mix by 2030.

With the country’s abundant and untapped renewable energy sources, this is an industry that has one of the biggest potential for growth.

Investments in this sector also have more benefits, which include fiscal (tax incentives) and non-fiscal incentives.

Another promising sector in the Philippines that can help your investment goals is its electronics industry. The country has abundant natural resources like chromite, nickel, and copper that provide ample supply for electronics production.

In fact, the country is one of the top exporters of electronics and a vital player in the global value chain, particularly in semiconductors.

With electronics exports accounting for a substantial 59.28% of total Philippine exports in 2023, it’s evident that the sector plays a pivotal role in the development authority the country’s economy.

This global demand for electronics and technology components bolsters its investment appeal, making it a prime choice for investors seeking exposure to the booming technology manufacturing sector.

With the passing Chips Act in the U.S. there is lot of room for growth in the semiconductor business. The U.S. Congress recent passing of the Chips Act helps improve the country’s supply of semiconductor wafers in the long haul.

The wafer supply makes the Philippines competitive in electronic exports which is in high demand in the international marketplace and a strong industrial sector. The bill grants over $52 billion in incentives for the semiconductor industry as well as a 25 percent tax credit for companies that invest in chip plants in the US.

Investors can also look at the diversified product portfolio of the electronics industry. This includes telecommunication, industrial, and consumer electronics, to name a few. With the presence of a number of special economic zone in the country, these certain sectors are sure to stay.

Real Estate

Real estate in the Philippines emerges as an ideal investment due to many favorable factors. First is the sustained economic growth that propels demand for residential, commercial, and industrial properties.

Moreover, urbanization trends spur the need for housing in metropolitan areas and robust infrastructure developments that enhance property values.

Additionally, the thriving tourism sector opens opportunities in properties such as hotels and resorts. At the same time, expanding businesses generate demand for various types of real estate.

With real estate’s historical stability and resilience, the Philippines presents a compelling landscape for investors seeking capital appreciation, rental income, and long-term growth potential in the real estate sector.

Finally, the Real Estate Investment Trusts (REITs) further open up the industry to more investors. Now, more people can have a stake and can earn money from real estate.

Mutual Funds

Some people want their money to grow but do not have time to do the work, so their funds remain dormant in a savings account. In this scenario, mutual funds are the best option, especially since they require minimum investment.

In the Philippines, mutual funds are regulated by the Securities and Exchange Commission (SEC), ensuring transparency and regulatory oversight. SEC also sets its implementing rules. Furthermore, its appeal as an investment vehicle lies in its diversified nature. Most importantly, they are handled by professional and experienced managers.

These advantages make mutual funds an accessible and convenient way for individuals to invest in professionally managed and diversified portfolios.

Other investors who are not into taking risks, can also look into Treasury bills or T bills as a good strategy for investment.

This way, they can enjoy the potential for long-term growth and income with a significant amount of risk reduction.

Make your investment count

The Philippines stands as a promising destination for investors as it rides the wave of sustained economic growth and embraces a welcoming environment for both local and foreign capital.

With diverse opportunities spanning industries such as BPO, digital infrastructure and artificial intelligence, renewable energy and geothermal capacity, electronics, real estate, and the accessible world of mutual funds, there is a multitude of paths for investors to explore and thrive in this dynamic market.

As the Philippine economy continues to evolve and prosper, those who strategically navigate these sectors can potentially reap the rewards of a robust and expanding economy, making their investment strategies not only prudent but also poised for success in the years to come.

Invest where your money can benefit from present market conditions and future returns. Check out Camella’s wide range of properties to augment your portfolio.