2023 Foreign Investment Opportunities in The Philippines

Posted by Written by Chris Devonshire-Ellis Reading Time: 7 minutes

Following where China has been spending and investing its Belt & Road Initiative capital can provide FDI clues and reveal new opportunities in recipient countries. As infrastructure builds start to yield productive user cashflows and the need for subsequent support services arises, case studies for investment potential become apparent. In this new series, we will be examining where China has spent its money and where returns on investment exist for foreign investors in piggybacking onto opportunities created by the BRI build.   

The Philippines has been a consistent recipient of Chinese investment for some time, and its geostrategic position – Hong Kong is just an hour’s flight away – has made it a hub for many red-chip Chinese investors. This, coupled with extensive infrastructure connectivity plans, better uniting the country, and the development of numerous free trade zones is seeing the Philippines take on a more dynamic role in the region than in the past. Savvy Chinese investors have also been able to score big with initial investments reaping significant rewards at subsequent IPO.   

Both light manufacturing zones and a nationwide digitization program are seeing Chinese investments made in conjunction with the China-ASEAN Free Trade Agreement and the recent RCEP agreement – the Philippines is a member of both ASEAN and RCEP and this shows how both China and the Philippines have been combining development with free trade and developing the countries manufacturing to allow it to become a China alternative. 


China is the largest trading partner of the Philippines and bilateral investment cooperation is booming with major projects being implemented smoothly. The Philippines and China bilateral trade reached close to US$82.05 billion in 2021 and has grown at an average of 17 percent over the past five years.  

Between 2016 and 2022, Philippines’ Central Bank data showed that firms from China and Hong Kong invested US$1.7 billion in the Philippines, trailing only Japan at US$2.8 billion but ahead of USA (US$1.3 billion), South Korea (US$1.1 billion), and Taiwan (US$580 million).  

While Japan continues to lead in aggregate amounts (Philippine SEC company registration database), Chinese based investors led in volume. From 2016 to 2018, there were 3,634 firms established with Chinese investors, far outranking new firms with Japanese (1,091) and US investors (1,317). During this period Chinese investors led the launch of and subsequent growth in the online gaming and on-site casinos as well as realising strong returns in real estate, especially around the Metro Manila area.  


In 2016, President Xi and China promised then Philippine President Rodrigo Duterte and the Philippines US$24 billion in investment, credit and loan pledges. As shown below, many of these projects have been delayed for numerous reasons but have recently picked up pace.  

In April 2022, Duterte inaugurated the China-funded Binondo-Intramuros Bridge, the second of two bridges funded through a Chinese grant. The Binondo-Intramuros Bridge is part of a US$96 million Chinese grant agreed upon during Duterte’s visit to China in 2017. The other bridge is Estrella-Pantaleon, which was completed in July 2021. Both bridges were initially planned to be constructed by 2020, but delayed due to the pandemic.  

Construction of the Bucana Bridge – which will complete the ongoing coastal road project in Davao City, and is expected to finally start in 2022 after more than a year of delay. The 540-meter, four-lane bridge, which will cost US$56 million, and was initially scheduled for construction from 2020 to 2023; the new target completion will be by 2025. The Bucana Bridge will be funded through a China government grant signed in December 2020. The 3.98 km Davao River Bridge is located in the Bucana District at the mouth of the Davao River, connecting the coastal roads. This toll free two-way four-lane bridge can serve around 25,000 vehicles/day between Davao City and Samal crossing over Pakiputan Strait.  

Davao Coastal Road – The Davao City Coastal Bypass Road Project stretches from the Davao-Cotabato highway junction to R. Castillo in Davao City’s central area. In February 2022, the first 2.8 kms of the US$610 million 17-km road was opened; with the remainder set for completion in December 2023.  

Mindanao Railway – With a cost of US$1.48 billion, the Mindanao Railway Phase 1 is among the major infrastructure projects funded by official development assistance (ODA) loans from the Chinese government. Once fully operational, travel time between Tagum City to Digos City will be reduced to about an hour from the current 3.5 hours. The line will also have eight stations: Tagum, Carmen, Panabo, Mudiang, Davao, Toril, Santa Cruz and Digos.  

In September 2021, the Transportation Undersecretary for Railways announced that the construction of the first phase, involves building a 100-kilometer train line connecting Tagum, Davao and Digos, will begin in late 2022. 

Makati Subway – In 2020, Infradev Holdings Inc. (Philippines) awarded a US$1.21-billion EPC contract for the first eight-km phase of the Makati subway project to China Construction Second Engineering Bureau Co. Ltd. (CCSEB). The contract covers civil works alongside mechanical, electrical and plumbing (MEP) works. The civil works alone were valued at US$978.6 million while the MEP portion was priced at US$234.16 million. The proposed Makati subway system, the Philippines first ever PPP project (no cost to the city) is expected to be completed by 2025.  

PNR South-Long Haul Project – In January 2022, China Railway Group signed with the Government the commercial contract for the US$2.8 billion PNR South Long-Haul Project DB railway for the design and construction of a 380 km railway in the Bicol Region. It will shorten the travel time from 12 hours currently to four hours, and will serve up to 14.6 million passengers per year (after it enters operations). The entire PNR Bicol project consists of a 560km long-haul rail line connecting Metro Manila to provinces in Southern Luzon.  


The Chico River Pump Irrigation project aims to irrigate 8,700 hectares of land in the provinces of Kalinga and Cagayan. The project involves building multiple structures including a pump house, sub-station, transmission line, canals, and access roads. The CRPIP is forecast to cost US$90 million, financed in part by a US$62 million loan from CEXIM as Official development assistance (ODA). CRPIP construction commenced in September 2018 and is expected to be completed in 2022.  

The 60-meter-high Kaliwa Dam, a US$255 million dam will cover a surface area of 291 hectares within Barangay Pagsangahan, General Nakar, and Barangay Magsaysay, Infanta, both in Quezon province. It also includes a 27.7-kilometer raw water conveyance tunnel traversing from the dam’s location to Teresa, Rizal. Once completed it will deliver 600 million liters of water/day to the capital region and nearby provinces, reducing dependence on Angat Dam in Bulacan and thus a solution to Metro Manila’s water requirements.  

It is being funded primarily by a US$211.2 million loan from CEXIM which was signed in 2018. The construction of the Kaliwa Dam was previously set for January 2020 until December 2025. In an interview with CNN in February 2022, the project manager now hopes to start the construction in June with a target completion date of August 2026.  

Selected key private company investments  


Dito launches 3rd Telco in the Philippines – Since 2011, two companies have dominated Philippine telecoms; PLDT/Smart and Globe — but their hold on the market is being tested by Dito Telecommunity, a new telco which was launched in March 2021. Dito is a consortium headed by Davao businessman Dennis Uy. His companies Udenna Corporation and Chelsea Logistics own 60% of Dito; China Telecom owns the other 40%. Together, the two partners have committed to investing US$5.4 billion. China Telecom said it plans to double its subscribers in 2022 from 5.3 million to 10 million to reach a target to secure a third of the nation’s communications market as early as 2024 when its network coverage rises to more than 80% of the population from 52.8 percent in 2020.  

Smart Phones – In Q2 2021, Xiaomi continued to be the leading growth brand y-o-y in the Philippines 5G – In February 2022, Globe Philippines recently announced that Huawei’s AirPON solution is helping Globe to build a faster and better fiber access network regarding FMC strategy. This solution utilizes existing thousands of wireless sites, helping Globe significantly improve FTTH network construction efficiency, reduce costs, and effectively cope with the network construction challenges brought by full-service transformation. As of the end of September 2021, Home broadband revenues posted a record ₱22.4 billion, (US$407 million) exceeding the same period of 2020 by 15 percent. The accelerated fiber rollout already yielded positive results with the increased take-up of FTTH lines of 240 percent and fiber revenues growing by 169 percent against 2020.  

Financial services  

In February 2017, Ant Financial made its initial investment in Mynt (45% stake), a financial venture from Globe Telecom (value: US$60 million), which has a micro-payment service and a mobile loan service. Globe is the Philippines’ largest operator with 66.6 million subscribers — with over 50% market share. In January 2021, Mynt, the company behind digital financial services provider GCash, announced a US$175 million capital raise which was completed at a valuation of circa US$1 billion. In November 2021, Mynt raised US$300 million in fresh capital at a valuation of over US$2 billion.  

Voyager – In October 2018, PLDT, a leading telecommunications, and digital services provider in the Philippines, signed agreements under which investors led by KKR and Tencent will separately subscribe to a total of up to US$175 million worth of newly-issued shares in Voyager Innovations. In April 2022, Voyager Innovations (PayMaya and neobank Maya Bank), announced it had raised US$210 million, bringing its valuation to US$1.4 billion.  

Looking ahead    

The Philippines economy is on an upwards track to recovery from the pandemic following a successful vaccination drive and the full withdrawal of movement restrictions. With a new President in office and longer-term political security in place, the economy is projected to expand 7.5 percent in 2022, driven mainly by a strong rebound in consumption. According to the World Bank, the Philippines has increased its income range for the upper-middle-income bracket to a GNI capital of US$4,096-US$12,695 from US$4,046-US$12,535. The Philippines targets to graduate to the upper-middle-income status by 2023. 

Philippines investment intelligence    

Readers may use the ASEAN Briefing search function at the top of the homepage to find more Philippines intelligence. Just type ‘Philippines’ into the subject box. We also provide investment assistance and research into the Philippines, please contact us at asia@dezshira.com for assistance.

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