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Year in review
The Philippines has made strides in lifting foreign ownership restrictions that previously hindered investment in numerous sectors. As an example of efforts to promote foreign investment opportunities in the country, Republic Act No. 11659 (RA No. 11659) amended the Public Service Act on 21 March 2022, by incorporating a clear definition of ‘public utility'. This amendment permits 100 per cent foreign ownership of public services in the Philippines that are not categorised as ‘public utilities’.
According to RA No. 11659, the term ‘public utilities’ only applies to the following industries:
- distribution of electricity;
- transmission of electricity;
- petroleum and petroleum products pipeline transmission systems; and
- water pipeline distribution systems and wastewater pipeline systems, including sewerage pipeline systems, seaports and public utility vehicles.
Only these ‘public utilities’ are subject to foreign equity restrictions.
Moreover, Republic Act No. 11595 (RA No. 11595) amended the Retail Trade Liberalization Act of 2000 on 10 December 2021, by lowering the required paid-up capital for foreign retail businesses and removing the requirements for foreign retailers to operate a minimum of five retail branches or franchises globally, along with a five-year retailing track record, in order to participate in retail trade within the Philippines.
Under RA No. 11595, foreign-owned partnerships, associations, and corporations can engage in retail trade upon registration with the Securities and Exchange Commission (SEC), or for foreign-owned sole proprietorships, upon registration with the Department of Trade and Industry (DTI), under the following conditions:
- the foreign retailer must have a minimum paid-up capital of 25 million Philippine pesos;
- the foreign retailer’s home country allows Filipino retailers to participate in retail trade; and
- for a foreign retailer operating multiple physical stores, for each store to have a minimum investment of 10 million Philippine pesos.
Furthermore, on 8 November 2024, President Ferdinand R Marcos Jr signed into law Republic Act No. 12066 (RA No. 12066) or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act. The law seeks to promote job creation and stimulate economic growth by strengthening the country’s tax and incentives framework. Building on the foundation of the earlier CREATE Act, CREATE MORE introduces enhancements designed to attract both local and foreign investments, with a particular focus on strategic and high-impact industries.
Under the CREATE MORE Act, registered business enterprises (RBEs) availing of the Enhanced Deduction Regime (EDR) are now subject to a 20 per cent corporate income tax. Additionally, the sale of goods and services to export-oriented enterprises, defined as those deriving at least 70 per cent of total annual production from export sales in the preceding taxable year, shall be subject to a 0 per cent value-added tax, provided such goods or services are directly attributable to the export activity of the enterprise. The income tax holiday (ITH) continues to apply to all RBEs for their registered projects or activities. Meanwhile, local government units (LGUs) may impose a local business tax of up to 2 per cent of gross income on RBEs. This RBE Local Tax (RBELT) shall be in lieu of all other local taxes, fees and charges imposed by LGUs. However, the RBELT does not apply to RBEs under the Special Corporate Income Tax (SCIT) Regime of 5 per cent, which remains in lieu of all national and local taxes, including fees and charges.4
To maximise the use of the private public partnership (PPP) framework in improving connectivity in the Philippines, the government plans to privatise the operations and maintenance of 10 more regional airports by 2028 through the PPP route. These include the airports in Iloilo, Davao, Siargao, Laoag, Busuanga, Bicol, Tacloban, Bacolod-Silay, General Santos and Puerto Princesa. The government is considering bundling several airports into a single contract to improve efficiency and investment appeal.5
On 29 May 2025, the government enacted Republic Act No. 12214, or the Capital Market Efficiency Promotion Act (CMEPA), which amends the National Internal Revenue Code of 1997 to implement key tax reforms aimed at streamlining and enhancing the competitiveness of capital markets. CMEPA standardises the tax rate on Philippine-sourced interest income, royalties and certain winnings at 20 per cent, including interest from foreign currency deposits, which was previously taxed at 15 per cent. Dividends are now taxed at a 10 per cent final rate, while capital gains from unlisted shares, whether domestic or foreign, are uniformly taxed at 15 per cent. To boost liquidity and reduce trading costs, the stock transaction tax on listed shares has been lowered from 0.6 per cent to 0.1 per cent, applicable to both local and foreign exchange transactions.
CMEPA also reduces the documentary stamp tax (DST) on original issuances of shares and debt instruments from 1 per cent to 0.75 per cent, covering both local and international issuances, including bonds and debentures. In addition, the following transactions are now DST-exempt: (i) sale, exchange, or redemption of listed shares on local or foreign stock exchanges; (ii) original issuances and redemptions of mutual fund shares; and (iii) issuance of certificates for mutual funds or unit investment trust funds.
The Philippine Development Plan 2023–2028 prioritises telecom and digital infrastructure reforms. A key measure is the Konektadong Pinoy bill, which is now awaiting President Marcos Jr’s signature after being ratified by both houses of Congress in June 2025. This bill aims to transform the telecom sector by opening the market, lowering network roll-out costs, and improving digital service quality. It removes the need for a legislative franchise to build and operate data infrastructure, replacing it with a simplified registration process with the National Telecommunications Commission.6
