October 27, 2026
MANILA – Investors looking to expand in the Philippines face mounting economic and political uncertainties, as a new report flagged “elevated” risks in the country’s business environment and warned that conditions could deteriorate further.
In its inaugural Philippine Political and Country Outlook Report, professional services firm WR Advisory Group gave the country an overall risk score of 10.375 out of 25 for the second quarter of 2026, placing it in the elevated-risk category with a deteriorating outlook.
Although the assessment covered only April to June, WR Advisory Group said it expects the prevailing risks to persist over the next six months to a year.
“What we saw is that the Philippines is undergoing an elevated risk for businesses,” WR Advisory Group president and CEO Robin Michael Garcia said at a briefing on Thursday.
“There is a palpable risk for businesses with varying levels of impact and varying levels of probability,” he added. “We feel that the outlook is deteriorating…particularly the risk on economic growth, which we feel is deteriorating fast.”
The assessment classified fiscal and sovereign risk as “high,” indicating that “significant disruption” is either “probable or underway,” which requires “active risk mitigation.”
The report cited mounting fiscal pressures, with government debt reaching P19.07 trillion, equivalent to 66 percent of gross domestic product, by the end of June.
Economic growth also slowed to 2.3 percent in the second quarter, while foreign direct investment net inflows fell 33.4 percent through May.
Garcia warned that persistent inflation and higher operating costs could further constrain businesses.
Political risks
Six other areas received an elevated classification, while experts rated security risk as low.
Analysts assigned deteriorating outlooks to four areas: political stability, policy and regulatory risk, fiscal and sovereign risk, and economic growth.
The report states that the outlook continues to deteriorate, indicating that “the drivers behind the current assessment are worsening, not stabilizing, and nothing scheduled in the forward window is set to reverse that.”
Garcia noted that political uncertainty is another concern, particularly for heavily regulated industries such as energy, mining and banking, whose operations depend on policy consistency and legislative action.
He pointed to leadership changes within the government and political fragmentation, noting that the Senate had become more volatile than the House of Representatives.Frequent Cabinet reshuffles disrupt policy continuity, even when leaders make appointments to address governance concerns.
Still, the report does not necessarily mean businesses should abandon their investment plans in the Philippines, Garcia said. “You can invest, but just know that there are risks,” he added.
“There has to be more contingency planning because of the many things that can change in the next few months, at least towards 2027.”
