⚠️ This post is for informational purposes only. It is not investment advice.
The Philippines is a dynamic, young, emerging Asian market. With a population of 115 million, the country has considerable growth potential. As the country continues to develop, modernize, and become wealthier, there are various opportunities that will emerge that foreign retail investors may consider.
However, investing in the Philippines is not as straightforward as in other Southeast Asian markets—like Vietnam—or other emerging markets in general. There are also some important caveats that investors need to consider before trying to profit in the country.
In this post, we explain some of the main ways foreigners can invest in the Philippines. We also provide some important things to consider and provide additional links and details for getting started. This post supplements our Youtube video on the same topic.
Why the Philippines?
The Philippines has averaged around 5-6% GDP growth over the past several years. The economy is driven by modernization, remittances from Philippine nationals abroad, a thriving BPO sector, growing domestic demand, and infrastructure investments, among others. Urban areas like Metro Manila and Cebu continue to develop, while resort areas like Bohol and Palawan are expanding tourism infrastructure for domestic and international tourists alike.
This economic expansion is driving consumer demand and spending, and there are now more opportunities than ever before in the country. Pending any major economic shocks, we can only expect this growth to continue, although how long the country can continue to grow at this rate remains uncertain.
Philippine Equities
The Philippine stock market is widely viewed as undervalued relative to both its regional peers and its own historical averages. Price-to-earnings and price-to-book ratios for the Philippine Stock Exchange Index (PSEi) remain below long-term norms, even as corporate earnings have begun to recover and the broader economy posts robust growth near six percent annually. This disconnect between fundamentals and valuation suggests that investors may be overly cautious due to short-term concerns such as inflation spikes, fiscal deficits, or global market volatility.
For long-term investors, this creates an opportunity: the underlying drivers of growth—remittances, a young and expanding workforce, rising infrastructure investment, and the steady expansion of services like BPO—point to an economy with resilient demand and earnings potential. If valuations eventually converge toward regional averages, today’s discounted prices could translate into meaningful upside, particularly for those willing to hold through periods of near-term volatility.
When it comes to investing in Philippine equities, the issue facing foreign retail investors is accessibility. Compared to regional peers like Vietnam, and even other markets in Asia like Mongolia, it is harder for foreign retail investors to open brokerage accounts in the country to access Philippine stocks directly.
Some brokers, like COL Financial or FirstMetroSec, do accept non-resident clients, but they often require in-person submission of documents or consular authentication (notarization at a Philippine embassy/consulate). Others may only onboard local residents with a Philippine bank account and Tax Identification Number. Funding can also be an obstacle, since international bank transfers add cost and complexity.
Thus, while it is hypothetically possible to open a brokerage account as a non-resident foreigner, numerous legal and logistical obstacles exist.
ETFs
Another viable option is to invest in Philippine ETFs. However, like investing in equities, there are various accessibility barriers that exist.
First, there are only a few ETFs available. For US investors, the iShares MSCI Philippines ETF (EPHE) is the only country-specific option. A comparable European option is the Xtrackers MSCI Philippines ETF (LU0592215403).
Second, there are regional ETFs that include the Philippines in their portfolio, such as the Global X FTSE Southeast Asia ETF (ASEA) or the iShares MSCI All Country Asia ex Japan ETF (AAXJ). But these only include a very small exposure to their Philippines: 3.8% and 1-2% respectively.
If you do manage to open up a local brokerage account, more options will be available, but accessibility will depend on your broker.
OTC Equities
For investors who want exposure to Philippine companies without opening a local brokerage account, several major firms trade in the U.S. through over-the-counter (OTC) equities. Examples include Philippine Long Distance Telephone Company (OTC: PHI), Jollibee Foods (OTC: JBFCY), Ayala Corporation (OTC: AYALY), and Globe Telecom (OTC: GTMEF), among others. OTC listings are typically in the form of American Depositary Receipts (ADRs) or unsponsored shares, which allow U.S. investors to buy and sell them in dollars. Liquidity and trading volumes may be lower compared to their home-market shares on the Philippine Stock Exchange, but for many investors, these OTC tickers provide a simpler and more accessible way to participate in the growth of the Philippines’ largest corporations.
Real Estate/REITs
The Philippines is home to a growing real estate market, with Metro Manila, Cebu, and certain resort cities seeing impressive growth over the past decade. However, like the options above, there are certain caveats to be aware of.
Like in other Southeast Asian economies, foreigners cannot own land, so foreign ownership is limited to condos. Also like other Southeast Asian economies, foreigners are limited to owning 40% of the units in a particular project. So while there are deals to be found, accessing them is again somewhat limited.
If real estate proper is too large an investment or a hassle, some Asian property funds also include the Philippines in their portfolios. Some of these include developments from major land developers in the country, such as Ayala Land.
If you can manage to open a local brokerage account, there are REIT options available, which return can return 5-7% dividend yields.
Conclusion
While there are many reasons to be bullish on the Philippines itself, right now there are not as many straightforward investment options available to foreign retail investors. You will have access to much more if you are based in the country and able to open local accounts and get yourself set up. If you believe the Philippines will make a good addition to your portfolio, it is important to you weigh your options carefully and consider the risks that come with investing in an exciting, yet still developing frontier market.
If you found this post informative, sign up for our newsletter for regular updates on emerging market investing and living insights.