Pervasive corruption—both in government offices and private boardrooms—along with slow and opaque bureaucracy, high logistics costs, and congested infrastructure continue to undermine the Philippines’ ability to attract foreign investment and sustain economic growth, according to the latest assessment from the US State Department.
In its “2025 Investment Climate Statements: Philippines,” the State Department acknowledged improvements made in recent years but said these were not enough to overcome structural barriers, regulatory inconsistencies, and weak export demand.
“Historically, the government’s efforts to attract foreign investments have been hampered by poor infrastructure, high power and logistics costs, regulatory inconsistencies, a cumbersome bureaucracy, and corruption,” the report said.
Corruption was singled out as “a pervasive and long-standing problem in both the public and private sector,” citing the Philippines’ 114th rank out of 180 countries in Transparency International’s 2024 Corruption Perceptions Index—roughly the same level since 2019.
The report said political and security environment in the Philippines is stable and does not present an ongoing concern for most foreign investors.
It appears the report pre-dates President Ferdinand Marcos Jr.’s recent exposé of questionable flood-control projects under the Department of Public Works and Highways, mentioned in his July 2025 State of the Nation Address. It still identifies the Bureau of Customs as “one of the most corrupt agencies in the country.”
Also flagged was the Philippine judicial system, described as “complex, slow, redundant, and sometimes corrupt.” The State Department noted that the inefficiency and unpredictability of the courts discourage foreign investors from pursuing legal remedies, especially in cases involving technology or scientific issues.
“Stakeholders report an inexperienced judiciary when confronted with complex issues,” the report said.
Traffic congestion and port inefficiencies were also cited as constraints, along with the economic dominance of large family-owned conglomerates that may crowd out smaller or international players.
While business conditions in special economic zones were more favorable, weak law enforcement and a burdensome property registration process continue to hinder investor confidence.
Despite efforts at reform, the report suggests the Philippines must address long-standing governance and infrastructure issues to unlock its full investment potential.
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