Multiple Challenges Hamper Philippines' Growing Potential for Energy Investment

The Philippine government is likely to continue its efforts to attract foreign investment to boost the development of the energy sector, particularly in regard to the country’s natural gas resources and the necessary supporting infrastructure, according to Maplecroft.

As the country moves to meet rising energy demands, liquefied natural gas is also expected to become a major energy source, presenting new business opportunities for foreign suppliers.

To improve the investment climate, the government is considering reforms, such as changes to the limitation on foreign ownership of public utilities.

Endemic corruption within the public and private sphere will continue to undermine the business environment, particularly due to the dominance of a few influential families in both areas.

The poor regulatory framework for the energy sector is also likely to pose risks to investors, with proposed amendments to existing legislation likely to exacerbate regulatory uncertainty. 

Although low-level conflict in the Mindanao region is set to continue in the medium term, it is likely to pose only a moderate threat to investors.

There are no signs of reducing tensions in the South China Sea, with the territorial dispute between the China and the Philippines set to continue in the long term. As a result, opportunities for exploration in disputed areas are likely to be greatly limited for the foreseeable future.

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