More than half of foreign companies surveyed expect to increase investments in the Philippines once a trade agreement with the European Union takes effect, but the country’s bureaucratic maze could stand in the way of a much bigger economic payoff.
The Fall 2026 AHK World Business Outlook survey by the German-Philippine Chamber of Commerce and Industry found that 57 percent of respondents expect to raise Philippine investments within three years of the agreement’s entry into force. None anticipate cutting their investments.
The optimism, however, comes with a familiar caveat. For companies looking to expand, navigating government procedures may prove more difficult than finding business opportunities.
Customs procedures and clearance times topped the list of potential obstacles, cited by 45 percent of respondents. Regulatory inconsistencies among government agencies and local governments followed at 41 percent, while tax administration and audit practices accounted for 40 percent.
Permitting delays were flagged by 36 percent, and foreign ownership restrictions by 34 percent.
The findings suggest that the benefits of a trade deal will depend not only on lower trade barriers between the Philippines and Europe, but also on how efficiently the country handles business at home.
Investment expectations were generally positive, with 15 percent anticipating a significant increase and 42 percent a moderate one.
The agreement could initially deliver more immediate gains through imports and investment than Philippine exports. Some 44 percent expect higher imports of European machinery, components, and intermediate goods, compared with 24 percent who foresee increased Philippine exports to Europe. Another 20 percent expect to shift sourcing or production from other ASEAN countries to the Philippines.
Yet optimism has not translated into an investment spending spree.
While 68 percent expect their businesses to improve over the next 12 months, only 29 percent plan to increase investments. A record 58 percent intend to keep spending unchanged.
The survey covered 59 companies in the Philippines from October 5 to 23, highlighting a familiar challenge: attracting investors is one thing; giving them fewer reasons to hesitate is another.
