Investors choose timelines, not taglines: Deliver regulatory clarity to win FMCG capital

Consistent rules, efficient borders, and reliable infrastructure are the signals FMCG investors need to expand plants, R&D, and reformulation in the Philippines.

By Florian Gottein, Executive Director, European Chamber of Commerce of the Philippines (ECCP)

The Philippines is at a pivotal moment. After a recent dip in GDP growth, the priority is to sustain momentum, create quality jobs, and raise productivity. Policymakers at the highest level have been clear: the private sector must be at the heart of that effort, especially in manufacturing, where the food and beverage sector can deliver tangible gains in livelihoods and inclusive growth.

Global economic advisory firm Oxford Economics estimates that in 2025 (based on analysis from an upcoming report to be released in early 2026), the agri-food sector, which includes agriculture, food and beverage (F&B) manufacturing, and distribution, contributed about one-third of national GDP (US$164.6 billion), supported roughly 18.8 million jobs (around 38% of total employment), and generated US$20.7 billion in tax revenues.

From the perspective of European food and beverage and FMCG companies operating in the Philippines, many with decades-long footprints in manufacturing, shared services, and regional supply chains, the country remains a strategic, long-term market. These firms typically make multi-year, capital-intensive investments and reinvest profits locally. For them, competitiveness is shaped less by short-term incentives and more by confidence in policy direction, regulatory sequencing, and the consistency of implementation over time.

The case for food and beverage investment in the Philippines is strong but not guaranteed. The country offers a large, young, urbanizing, digitally connected consumer base, while demand for safe, affordable, and convenient products continues to rise and domestic supply chains are deepening. At the same time, investors compare the Philippines with its ASEAN neighbors every day.

Regional competition for capital is intense, and companies place long-term bets where rules are predictable, logistics are efficient, and policy direction is coherent and consistent. Trade architecture also plays an important role. The Philippines’ active participation in the Regional Comprehensive Economic Partnership (RCEP) and its pursuit of accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) signal intent to integrate more deeply into regional value chains.

The Philippines has already taken important steps to improve its investment climate and modernize trade facilitation, signaling openness to capital, innovation, and deeper regional integration. As Oxford Economics notes, these frameworks bolster openness and can enhance the country’s attractiveness to investors — provided domestic conditions enable firms to invest and scale.

This is where the “predictability advantage” matters: long-term investments in plants, supply chains, and R&D depend on regulatory clarity and consistent timelines.

In practice, EU companies operating in the Philippines often note that the challenge is rarely the policy objective itself, but uncertainty around implementation. Frequent regulatory changes, overlapping mandates, delayed implementing rules, or short transition periods can disrupt investment planning — particularly for product reformulation, labeling updates, and import sourcing. When timelines are unclear, firms defer or re-sequence investments not out of reluctance, but because scaling production and upgrading facilities require certainty. Predictability is therefore not just a regulatory virtue, but a core competitiveness factor that enables capital allocation, innovation, and reformulation while supporting public health objectives and consumer affordability.

European food and beverage companies are already investing heavily in reformulation, fortification, responsible labeling, and nutrition-focused innovation. These efforts align with public health objectives but depend on clear lead times, science-based thresholds, and early regulatory dialogue. Predictability accelerates compliance and enables better nutrition at scale and at affordable prices.

Trade can be a powerful engine for modernizing Philippine manufacturing. RCEP, alongside ASEAN Trade in Goods Agreement (ATIGA) commitments, can lower input costs, streamline sourcing, and expand market access for Philippine-made products. Citing estimates from the Economic Research Institute for ASEAN and East Asia (ERIA), Oxford Economics reports that effective implementation of RCEP could lift Philippine exports by around 5.1% and GDP by about 3.4% by 2035. At the same time, the resumption of negotiations toward an EU-Philippines Free Trade Agreement (FTA) presents a strategic opportunity to deepen access to one of the world’s largest and most sophisticated consumer markets. For food and beverage and FMCG producers, an ambitious and balanced EU-PH FTA could support higher-value exports, promote regulatory cooperation, and reinforce standards on food safety, sustainability, and intellectual property — areas where Philippine producers and EU investors already share strong alignment. Potential CPTPP accession would connect the Philippines to even higher-value supply chains in processed food, ingredients, and FMCG production. Countries that extract the most value from trade agreements tend to pair them with predictable domestic regulatory pathways, enabling firms to translate new market access into new capacity, jobs, and innovation at home.

European investors bring capabilities that support Philippine priorities, including world-class food safety and traceability systems, energy-efficient processing, sustainable packaging, and supplier development. With the right enabling conditions, EU firms can help integrate local SMEs into regional value chains and advance food security and sustainability goals.

Global headwinds also warrant attention. Trade tariffs and geopolitical disruptions can affect supply chains, particularly for net food importers. Such shocks often flow through to domestic prices and investment decisions. Keeping food inflation in check remains a core policy priority. Open and predictable trade helps by allowing producers and consumers to benefit from redirected global supply when major markets close or reroute.

Many consumers continue to struggle with inflation, and FAO estimates indicate that a significant share of the Philippine population faces moderate or severe food insecurity — underscoring why stable prices and reliable supply matter.

There are practical channels for capturing trade benefits. Competitively priced imports of key feed inputs can ease downstream price pressures, provided import policies are transparent and customs procedures efficient. Trade diversion can also create export openings, but capturing these depends on firms’ ability to scale capacity and meet standards quickly.

Over the medium term, competitiveness will hinge on a small set of critical enablers. While progress has been made in customs and trade facilitation, gaps remain in logistics infrastructure — particularly ports, inter-island shipping, roads, and cold-chain capacity — that continue to add cost and uncertainty for manufacturers. High and volatile energy costs also weigh on processing, packaging, and cold storage, underscoring the importance of expanding renewables, improving grid efficiency, and strengthening energy reliability. Recent reforms to the Public Service Act, alongside changes to the Retail Trade Liberalisation Act and the Foreign Investments Act, point in the right direction by signaling greater openness to investment. However, Financial Times fDi Markets data show that greenfield agri-food investment in 2022-2024 remained below 2017-2019 levels — highlighting that the impact of these reforms will depend on consistent implementation, faster approvals, clear screening requirements, and strong inter-agency coordination.

The Philippines has taken steps toward digital and sustainable trade facilitation, including expanding electronic processing of trade documents such as sanitary and phytosanitary (SPS) clearances. Building on this progress, further streamlining through a fully operational customs single window, broader access to Authorised Economic Operator programmes, and wider electronic exchange of SPS and origin certificates would improve speed and predictability at the border. These operational details are what make trade agreements tangible for exporters and firms seeking to integrate into regional value chains.

Across Asia, FMCG companies continue to invest in R&D, innovation, reformulation, and workforce development. This mirrors what we see among companies operating in the Philippines: a focus on product upgrades, better nutrition, and supply-chain resilience. In conversations with industry CEOs and regional decision-makers, the message is consistent: the Philippines is a market they want to grow in. The pace and scale of that growth, however, depend on confidence that regulatory pathways are clear, timelines are realistic, and policies are implemented in a coordinated and predictable manner.

So, what will help the Philippines stand out? Anchor trade opportunities with domestic predictability and clarity. Improve interagency alignment on regulatory timelines and priorities. Encourage innovation, product development, and manufacturing upgrades through practical incentives and faster approvals. And keep the focus on stability and sequencing, so policies aimed at public health achieve their goals while enabling industry to invest, reformulate, and expand access to better nutrition at affordable prices.

The Philippines has the right ingredients: a large and dynamic consumer base, access to major regional trade frameworks, and clear government signals that the private sector is a partner in growth. With the enabling conditions in place, the country can position itself as a regional hub for food and beverage manufacturing. Our sector is ready to contribute — through jobs, productivity, innovation, and resilience.

Sustained government-industry collaboration will be essential to ensuring that policies are well-sequenced, evidence-based, and practical to implement. That is how we turn today’s promising conditions into a durable advantage for the decade ahead.

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