Global financial services group Macquarie is optimistic about the Philippines’ economic future, with an executive saying that “from a business perspective, I think that the best is yet to come.”
Macquarie, which employs over 1,000 people in the Philippines, offers services including mergers and acquisitions, public-private partnership advisory, equity research asset management and global support functions.
The Australian group noted in its website that while all markets carry investment risks, the Philippines’ current landscape presents significant new opportunities across various sectors, underpinned by robust economic fundamentals.
“There’s a lot more focus on Southeast Asia among investors, especially as their understanding of the region grows. Over time, with the maturity of the market and investor interest, we believe even larger opportunities will emerge more frequently,” said Trishia Simeon, associate director for Macquarie Asset Management.
“We’re confident that by continuing to work closely with our partners, the investment outlook in the Philippines will continue to look ever more exciting,” she said.
Macquarie Group chief executive Shemara Wikramanayake was recently appointed the Australian government’s business champion for the Philippines. In late 2024, she led a delegation of prominent institutional investors to the Philippines, representing $1.1 trillion in funds and assets under management and companies with $78 billion in market capitalization.
Macquarie noted that the Philippines has been the second-fastest growing economy in Southeast Asia for the past three years, with annual GDP growth between 5 percent and 7 percent. This growth is forecast to continue at around 6 percent annually for the remainder of the decade.
Consumer spending is the primary contributor to the country’s GDP, a factor that enhances the economy’s resilience to external shocks.
“The Philippines is a very local, consumption-driven market – around 70 percent of GDP is driven by local spending. So, it remains relatively insulated from the gyrations of the global geopolitical and economic landscape,” Simeon said.
The country’s population has a median age of 25.7 years, providing a “demographic dividend” that contrasts with the aging populations in some neighboring countries.
“The biggest point of optimism for the Philippines is its demographics,” said Justin Ocampo, managing director for the Philippines at Macquarie Capital. “We have a young population and a growing base of opportunity for many young Filipinos.”
The Philippines also has a growing middle class, with the proportion of middle-income earners rising from 29 percent in 2018 to 40 percent in 2021.
“The young, dynamic population will support sustainable growth, driving demand for higher-quality products and services as economic mobility rises,” Ocampo said.
Macquarie anticipates that as the nation’s “population bulge” matures and enters its most productive years, it will fuel greater domestic consumption and economic growth. This growth will also necessitate investment in key infrastructure to support digitalization, energy resilience, and urbanization.
To modernize infrastructure and improve essential services, the Philippine government has actively sought to attract foreign investment. This includes liberalizing foreign investment laws, lowering corporate income tax rates, and offering greater fiscal incentives to qualified companies.
While development levels vary significantly across the Philippines, from the advanced infrastructure of Metro Manila to rural areas with limited basic services, the country acknowledges the need for private capital to address its infrastructure deficit. Currently, there are 176 public-private partnership (PPP) projects in the pipeline, valued at P2.47 trillion.
These projects, spread nationwide, encompass airports, hospitals, bridges, rail and road networks, and water and sanitation initiatives. They are designed to address both immediate and medium-term gaps in critical systems as the Philippine economy matures.
“There are more and more opportunities in the Philippines, yet as with any emerging economy, the path to success is never a straight line,” Simeon said. “This is where the value add of an experienced infrastructure investor that has been in the market for a long time comes into play.”
Simeon noted that many potential inbound investors are surprised by Macquarie’s long-standing presence in the local market. “Not many people realize we have been present in the Philippines for 20 years,” she said.
“Macquarie was investing here long before it became an attractive destination for private capital. Our teams have deployed $2 billion of capital into eight investments across the country, including in energy, transport and logistics,” she said.
Macquarie Capital has invested in PhilTower, a telecommunications towers company, since 2021, supporting its growth. Telecommunications towers are crucial for mobile and internet connectivity, forming the backbone of reliable communications networks.
In September 2024, PhilTower and Miescor Infrastructure Development Corp. (MIDC) completed a transaction combining their existing towers and expertise. This created one of the largest independent telecommunications tower companies in the Philippines, with a portfolio of over 3,300 operational towers. The new PhilTower is well-equipped to meet the country’s increasing demand for connectivity and quality digital infrastructure.
“The need for digital infrastructure is being driven by the continued consumption of digital services,” Ocampo said. “Amidst our growing digital economy, there are still some notable gaps in towers and fiber, which are of course opportunities for investors.”
