Unlike other countries in Southeast Asia, the Philippines has seen continued acceleration in private capital deployment, driven by larger transactions and a broader mix of financing structures, a new study finds.

About US$1.5 billion in private capital was deployed in the Philippines in 2025, up 34% from the previous year, according to the 2026 Philippine Private Capital Report, co-authored by Foxmont Capital Partners and Boston Consulting Group. This signals sustained investor interest despite tighter regional and global capital conditions.

“The Philippines is a growing high-potential market and investment destination, with its favourable worker demographics and strong growth potential,” the report says, adding that the country remains a “bright spot” in a slowing regional market.

By comparison, neighbouring Indonesia and Vietnam saw contractions of  32% and 30%, respectively, during the period.

In the same report, Foxmont says fintech remains the most active sector by deal count, while e-commerce and business-to-business ( B2B ) Software-as-a-Service ( SaaS ), both of which were among the top-funded sectors last year, saw a decline. Meanwhile, direct-to-consumer ( D2C ) and cleantech emerged as fast-growing sectors, attracting increased investor interest.

Focus on productivity

During the panel discussion that followed the report’s release, Jelmer Ikink, managing partner at Foxmont, says venture capital investing in the Philippines is in a period of transition from a consumption- and labour-driven growth model to one that is more focused on productivity.

“The Philippines has long benefited from favourable demographics and resilient demand, but the next phase of growth will depend on productivity, capital formation, and stronger firms,” Ikink says, adding that private capital firms such as Foxmont can play a more central role once this transition is complete. 

In the report, Foxmont and BCG say that like in previous years, micro, small and medium-scale enterprises ( MSMEs ) still face a significant funding gap in the Philippines. 

MSMEs are vital to the Philippine economy, accounting for 99.6% of business enterprises, generating 67% of total employment, and contributing to 40% of the national GDP. Despite their economic significance, however, MSMEs receive only 4.1% of overall banking loans. 

“While the government has made efforts to encourage MSMEs to receive a larger share of loans, reluctance from both supply-side and demand-side stakeholders explains the limited share of banking loans that are allocated to MSMEs,” says the report. 

According to Ikink, Foxmont, which has had three funding rounds so far, exclusively focuses on MSMEs in the Philippines. To date, the company has deployed 1.5 billion pesos ( US$24.92 million ), with a goal of increasing investments to as much as four billion pesos in the next few years. 

“Obviously, we’re a small player compared to the size of the problem [but] we see the gap in capital allocation in the Philippines, and that’s exactly where we put our money to try and offset some of that gap,” he says. 

Strong due diligence

To manage the risk of lending to early-stage start-ups and MSMEs, Foxmont undertakes a “very long and strong” due diligence process. 

“We have a very active portfolio management team that works with our portfolio companies on a day-to-day basis,” Ikink tells The Asset. “It’s not just putting money in and hoping the company will grow; it’s active management and bringing capital, knowledge and people into these firms we invest in.”

Bea Mantecon, director of value creation at Foxmont, says that slowly but surely, private capital is becoming more important in the country, not just in terms of volume of deals but also in how it is deployed into sectors that can raise output, deepen capabilities, and drive long-term value creation. 

In the coming years, the company says, it is looking to invest in agriculture, healthtech and manufacturing sectors.