Philippines slips two places in investor confidence index despite income upgrade
The Philippines fell two spots to 18th out of 25 emerging markets in Kearney’s 2026 Foreign Direct Investment Confidence Index, trailing Thailand, Malaysia, Indonesia and Vietnam.
Source: RSS · July 23, 2026 at 1:02 AM · AI-assisted report
SINGAPORE, 23 JULY 2026 —
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The Philippines fell two spots to 18th out of 25 emerging markets in Kearney’s 2026 Foreign Direct Investment Confidence Index, trailing Thailand, Malaysia, Indonesia and Vietnam.
Market Impact
Kearney Philippines country head Marco de la Rosa and Southeast Asia managing partner Varun Arora said the country’s new upper-middle-income status should strengthen its appeal to investors but has not yet translated into higher rankings. “Unfortunately, in the last two to three years, the Philippines has dropped in the FDI index and investment rankings compared with ASEAN peers, which is reflected in capital flows,” Arora told Philstar.com.
Kearney’s index ranks markets where global business leaders expect to deploy capital over the next three years. The Philippines ranked 18th in 2026, down from 16th in 2025. Thailand placed sixth, Malaysia seventh, Indonesia 13th and Vietnam 16th.
De la Rosa said the income upgrade should, in theory, improve the Philippines’ score because financial performance is one factor in the index. “It should improve the Philippines’ ranking in the confidence index because at least the scoring will rise now that this financial performance factor is reflected,” he said. “But it also depends on how the other factors hold up.”
Global executives identified talent and skills availability, natural resources and economic performance as the top drivers of investment into the Philippines. Investors rated the country lowest on infrastructure and governance, pointing to structural gaps that could erode long-term competitiveness.
The World Bank reclassified the Philippines as upper-middle-income after gross national income per capita reached $4,850, clearing the $4,636 threshold. The change ended nearly four decades as a lower-middle-income economy.
Yet de la Rosa noted the Philippines sits near the bottom of the upper-middle-income bracket, which ranges from $4,636 to $14,375 in GNI per capita. “We’ve moved up a level in classification, but we remain, from a GNI standpoint, below Vietnam, Thailand and Malaysia,” he said.
The new income status is like a football club promoted to a tougher league, he said: the progress is real but the competition is fiercer. President Ferdinand Marcos Jr. has already used the upgrade in investor roadshows. During a July 14–16 visit to Singapore, he called the Philippines a newly designated upper-middle-income country with “solid macroeconomic fundamentals.”
“As a newly designated upper-middle-income country with solid macroeconomic fundamentals, the Philippines offers a secure, transparent and stable environment for businesses to thrive,” Marcos said in his arrival statement.
Kearney urged Manila to move faster on infrastructure, governance and economic diversification. De la Rosa said the upgrade should be seen as a starting gun, not a finish line. “The stakes will only keep getting higher,” he said. “Ultimately we need to compete to win.”
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