The Impact of Regulatory Changes on Services of M&A Advisors in the Philippines

The mergers and acquisitions (M&A) scene in the Philippines is evolving, thanks to new regulations and economic policies aimed at attracting foreign investors. Despite challenges like weather disruptions, the country maintained a 5.6% GDP growth in 2024, making it the second-fastest-growing economy in ASEAN (IFLR, 2025)[1]. The outlook for 2025 remains positive, with a projected GDP growth of 6.0% to 8.0% (IFLR, 2025). This article explores how changes in regulations, technology, and sustainability trends are shaping the role of M&A advisors in the Philippines.

Regulatory Reforms and Their Impact on M&A

Streamlining Investment Processes

Executive Order No. 18 (EO 18) is a significant move, as it established "Green Lanes" to expedite permit applications for critical investments. It also implemented a one-stop digital site to track applications, reducing delays (IFLR, 2025. The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act) and its successor, the CREATE MORE Act, increased the economy's competitiveness by providing tax breaks to enterprises (IFLR, 2025). These rules benefit M&A advisors by making transactions easier and recruiting more overseas investors.

Easing Foreign Direct Investment Restrictions

Historically, the Philippines had restrictive foreign direct investment (FDI) rules. However, recent legislative changes have shifted towards a more liberal environment, easing equity and management restrictions. This shift is expected to boost inbound M&A activity, particularly in sectors like energy and technology (Law.asia, 2022)[2]. The Philippine Competition Commission continues to play a vital role in ensuring fair competition, requiring notifications for transactions exceeding specified thresholds to prevent anti-competitive mergers (Law.asia, 2022)

Market Opportunities and Challenges for M&A Advisors

Emerging Sectors Driving Growth

Renewable energy, fintech, and digital infrastructure are driving M&A activity in the Philippines. Renewable energy is poised for significant growth, thanks to loosened ownership laws and ambitious green energy targets (IFLR, 2025)[1]. In 2024, the energy sector experienced $3.7 billion in deals across 21 transactions, indicating high potential for partnerships and acquisitions (Philstar, 2025).

Fintech is also a significant participant in M&A, spurred by the expansion of digital payments and larger corporations acquiring smaller enterprises to bolster their market position (IFLR, 2025)[1]. The recent acquisition of Cashalo exemplifies the growing desire for alternative credit options and financial innovation (IFLR, 2025).

Navigating Regulatory Complexity

Despite these prospects, M&A consultants must navigate overlapping requirements and manage delays in state agency approvals. To avoid regulatory risks, proactive strategies include conducting pre-filing conversations with the PCC and creating conditional closing agreements (Law.asia, 2022). Advisors must also verify compliance with corporate and tax rules, such as the Revised Corporation Code and the National Internal Revenue Code(Respicio & Co., 2025).

Technological and Sustainability Trends in M&A

Integration of Technology in M&A Transactions

AI-powered platforms are revolutionizing M&A by automating contract analysis and reducing review times. This technological integration enhances efficiency and accuracy, allowing advisors to provide more effective services to clients (PwC Philippines, 2025)[3]. The Philippines is also seeing increased interest in integrating AI across various industries, despite existing digital skills gaps (PwC Philippines, 2025).

Emphasis on Sustainability and ESG Practices.

The PENCAS Act has institutionalized natural capital accounting, underscoring the Philippines’ commitment to balancing economic growth with environmental conservation. This move is likely to attract ESG-conscious investors, reinforcing sustainability as a key driver of investment decisions (IFLR, 2025)[1]. Advisors now prioritize targets with strong ESG profiles, as these are increasingly valued by investors seeking long-term sustainability alongside financial returns.

Future Outlook for M&A in the Philippines

Projected Growth and Opportunities

The M&A market in the Philippines is poised for continued growth, driven by government-led initiatives, enhanced investment incentives, and a strong push for sustainability and digitalization. New infrastructure projects and advancements in telecommunications are expected to fuel this growth (MB, 2025)[3]. The energy sector, in particular, will see sustained activity as investors capitalize on renewable energy targets and liberalized ownership rules (IFLR, 2025).

Evolving Roles for M&A Advisors

Advisors must now offer post-merger ESG audits, provide geopolitical risk assessments, and upskill teams in AI tools and regulatory analytics to remain competitive. The ability to navigate the evolving regulatory environment, sustainability imperatives, and digital transformation trends will be crucial for the success of M&A transactions in the Philippines (IFLR, 2025).

Key Takeaway 

The Philippines’ M&A landscape is undergoing significant transformations driven by regulatory reforms, technological advancements, and sustainability trends. As the country positions itself as a premier destination for foreign investment, M&A advisors must adapt to these changes by mastering sector-specific regulations, leveraging technology, and prioritizing sustainability. By doing so, they can unlock value for clients and contribute to the nation’s economic ambitions. The future of M&A in the Philippines looks promising, with growth expected across key sectors like renewable energy and fintech.