Private capital funding in the Philippines rose by approximately 34% year-on-year in 2025, according to the 2026 Philippine Private Capital Report by Foxmont Capital Partners. This growth occurred despite a general decline in venture funding across much of Southeast Asia, driven by larger transaction sizes and a broader variety of financing structures.
Foxmont Capital Partners, a Philippine-focused early-growth capital fund that acts as a bridge between local founders and foreign capital, notes that the country is entering a structural transition. The report suggests a move from a growth model driven by consumption and labor toward one led by productivity. While the Philippines continues to benefit from strong demographics, long-term growth will increasingly depend on “capital deepening”—investments that raise output per worker and allow firms to scale into higher-value industries.
Currently, gross fixed capital formation in the Philippines stands at 21% of GDP, trailing the 30–40% seen in faster-growing peer economies. Closing this gap could require an additional $40 billion to $90 billion in annual fixed-asset investment. “The Philippines has long benefited from favorable demographics and resilient demand, but the next phase of growth will depend on productivity, capital formation, and stronger firms,” said Jelmer Ikink, Managing Partner at Foxmont. Bea Mantecon, Director of Value Creation at Foxmont, added that private capital is becoming more critical in how it is deployed into sectors that raise output and drive long-term value.
Industry leaders at a recent Foxmont forum noted shifting investment patterns within organizations. Anthony Oundjian, Managing Director of Boston Consulting Group, highlighted that while technology remains a priority, the nature of that investment is evolving. “Our clients are really investing in technology, and mostly upgrading to cater for the emerging middle class. What we don’t see as much yet is investments in automation, but we’re at the cusp of a change there,” Oundjian said.
At a broader ecosystem level, Andrew Jeffries, Country Director of the Asian Development Bank, noted the role of Philippines-focused venture capital firms in furthering the country’s economy. “In the next three years, if players like Foxmont are able to double in size, with more funding raised and capital flowing, that would be a strong signal,” Jeffries said.
The report identifies specific sectors where productivity gains are most accessible. In the semiconductor industry, moving from assembly and testing into integrated circuit design could significantly increase domestic value capture. In the services sector, the divide is already visible; technology-enabled firms, such as e-commerce platforms, generate over $135,000 in output per worker annually—roughly 50 times higher than traditional retail.
Expansion into the countryside remains a priority for the ecosystem. Jonathan De Luzuriaga, President of the Philippine Software Industry Association, highlighted the talent pipeline available for this transition. “We graduate about 120,000 – 140,000 computer science and IT professionals each year. Based on our roadmap, we foresee that 500,000 out of the millions joining the workforce by 2028 would be from the countryside,” De Luzuriaga said.
Ultimately, the report concludes that the Philippines possesses the necessary demand and talent, but lacks sufficient capital per worker. The trajectory of the country’s next growth phase will likely be determined by how effectively private capital is directed toward business models that improve value capture across the economy.
Download the full report here.