The Philippines saw the closing of 42 mergers in the first half of 2023 with values of $3.4 billion, up 40 percent from the 30 deals finalized in 2022.
PWC Philippines said that in the first half of the year, deals in the country focused on modernization efforts in industries such as telecommunications and construction, driven by increased government efforts to attract foreign investments and develop infrastructure.
The Philippines’ merger and acquisition landscape saw a surge in deals in the telecommunications and construction industries with the majority led by domestic investors.
It said while there were significant inbound investments from Singapore, the largest deal of the year so far came from a joint acquisition deal with Japanese trading house Mitsui & Co. Ltd.
Deals in telecommunications and real estate highlighted capitalization opportunities in sectors where asset development is being prioritized, it said.
Numerous transactions across the food and beverage industry demonstrated growth initiatives from local companies, along with an increased potential for international expansion.
Deals that focus on construction, specifically in infrastructure, reflect how government initiatives for development have affected the M&A landscape as a whole, it said.
Government spending on infrastructure showed a 7.3-percent increase to P200 billion from P183.2 billion in the same period in 2022.
The government plans to continue investing heavily in infrastructure over the medium term, with target investments of 5 percent to 6 percent of the gross domestic product. As of March 2023, the Marcos administration approved 194 new infrastructure projects to compose a development pipeline worth P9 trillion.
The Philippine Competition Commission in March 2023 increased the threshold for mandatory notification of M&A deals to P7 billion for size of party and P2.5 billion for size of transaction.
The recent regulatory changes in the Philippines are encouraging foreign investment activity in M&A deals, particularly in telecommunications and renewable energy sectors, PwC said.