M&A Guide 2026: Philippines

The Philippine M&A market in 2025 operated against a more demanding backdrop than the year before. A combination of domestic and external pressures – including elevated global interest rates, US tariff uncertainty, a weakening peso, and the dampening effect of the flood control scandal on government spending – held overall deal activity below 2024 levels. As noted by Isla Lipana & Co. (PwC Philippines) in its 2025 M&A outlook (the PwC Report), the total deal value in the Philippines reached approximately US$4.6 billion across 74 transactions, down 46% in value and 35% in volume from the $8.6 billion and 113 deals recorded the prior year.

Yet despite the decline, the underlying quality of deal activity remained strong. Based on the PwC Report, energy and natural resources accounted for 29.7% of total deal volume, or around $1.9 billion across 22 transactions, underscoring how consistently the sector has driven Philippine M&A over the past several years. Through it all, key investor drivers held firm: continued regulatory liberalisation, robust deal flow from the energy transition, and steady movement of cross-border capital.

The legal architecture governing Philippine M&A is well established. The Revised Corporation Code (RA 11232) sets out the mechanics of mergers, consolidations, and share or asset acquisitions. The Securities Regulation Code (RA 8799) and its mandatory tender offer rules govern transactions involving public companies. The Philippine Competition Act (RA 10667) requires parties to notify the Philippine Competition Commission (PCC) where transactions exceed compulsory thresholds, which, effective March 1 2026, stand at PHP 9.1 billion for size of party and PHP 3.8 billion for size of transaction following the PCC's annual inflation-linked adjustment.

The Philippines’ investment case is bolstered by the CREATE MORE Act, which is not fully operational. Registered business enterprises benefit from a reduced 20% corporate income tax rate under the Enhanced Deduction Regime, with the total incentive duration now extended up to 27 years for strategic, high-impact projects.

What distinguished 2025 was the volume of new legislation layered on to this foundation, each carrying meaningful implications for cross-border transactions. The Philippine National Nuclear Energy Safety Act (RA 12305, or the PhilATOM Act), enacted in September 2025, established an independent nuclear regulatory authority with a nationality-neutral licensing regime, allowing Filipino and foreign entities alike to apply for authorisations for nuclear activities on an equal footing. The implementing rules of the PhilATOM Act are expected in 2026. While the sector remains at an early stage, this legislation marks the Philippines’ formal commitment to nuclear energy as part of its long-term power mix.

The Accelerated and Reformed Right-of-Way Act (RA 12289, or the ARROW Act) addresses one of the more persistent complications in Philippine infrastructure deals: land acquisition. To resolve long-standing right-of-way impediments, the new framework adopts a two-pronged approach: it grants delegated eminent domain authority to private players in key sectors – including electricity, petroleum, and water – and mandates a unified Schedule of Market Values under RA 12001. These reforms are designed to streamline infrastructure transactions and provide the valuation certainty required for complex project financing. The practical effect is a lower risk profile for infrastructure and utility transactions and, over time, stronger bankability for assets that were previously harder to finance because of right-of-way exposure.

The year’s defining transaction was Prime Infrastructure Capital's acquisition of a 60% controlling stake in First Generation Corporation’s gas-fired power and liquefied natural gas (LNG) terminal assets, which reached financial close in November 2025 at approximately PHP 50 billion ($850 million). The portfolio spans five power plants – namely, Santa Rita Power Plant (1,000 MW), San Lorenzo Power Plant (500 MW), San Gabriel Power Plant (450 MW), Avion Power Plant (97 MW), and the proposed Santa Maria Power Plant (1,200 MW) – together with an interim offshore LNG terminal in Batangas City.

By consolidating production, regasification, and power generation under one roof, the transaction created something the Philippines had not previously had: a single entity with end-to-end control over the gas supply chain. It was reported that the transaction was financed through a PHP 47.07 billion loan facility arranged by BDO Capital & Investment Corp., with BDO Unibank serving as anchor lender at 60% of the facility and the Bank of the Philippine Islands contributing the remaining 40% (approximately PHP 18.8 billion) under a ten-year term, signalling a deepening domestic bank appetite for large-scale energy transactions of this complexity.

The transaction’s broader significance lies in the regulatory framework that now surrounds it. The Natural Gas Industry Development Act (RA 12120), signed in January 2025, established the first formal framework for the Philippines’ downstream natural gas sector, covering the importation, storage, transmission, and distribution of LNG. RA 12120 provides the broader foundation within which transactions of this kind are now expected to multiply. The law prioritises locally sourced gas and allows importation only under defined conditions, primarily when local gas prices exceed imported LNG, while introducing fiscal incentives such as VAT exemptions on indigenous natural gas purchases and sales.

The Department of Energy (DOE) issued the implementing rules as DC2025-04-0005 in April 2025, providing the operational structure for what the government envisions as a Philippine LNG trading and trans-shipment hub in the Asia-Pacific region. Taken together, the transaction and the legislative framework signal the emergence of natural gas as a sustained deal theme in the Philippine M&A market.

The government’s push to raise the share of renewables in the power mix to 35% by 2030 and 50% by 2040 has become the central driver of Philippine energy M&A. DOE Department Circular 2022-11-0034 already permits up to 100% foreign ownership in the exploration, development, and utilisation of solar, wind, hydro, ocean or tidal, and waste-to-energy resources, a shift that has meaningfully expanded the universe of viable transaction structures and counterparties.

The DOE formally launched the fifth Green Energy Auction (GEA-5) in November 2025, offering 3,300 MW of fixed-bottom offshore wind capacity at an approved reserve price of PHP 11.00/kWh, with supplier registration open as of March 2 2026. GEA-5 is the first auction round dedicated exclusively to offshore wind. It is expected to drive a new wave of joint ventures, consortium formations, and platform-level M&A as developers, particularly international players entering the Philippine market, seek to pair technical capacity with local market knowledge. According to the DOE, its broader 10-year auction programme covering GEA-5 through GEA-9 and including a dedicated round for waste-to-energy facilities is projected to attract up to PHP 25 trillion in investments and deliver at least 25 gigawatts of new capacity across offshore wind, solar, battery energy storage systems (BESSs), biomass, geothermal, and hydropower.

Complementing the auction programme, the DOE issued Department Circular No. DC2026-02-0008, which requires all renewable energy projects with a capacity of 10 MW or more to integrate a BESS. The mandate responds to the grid reliability challenges that have accompanied the rapid build-out of intermittent generation. It adds to project costs, a factor that will need to be carefully modelled in deal economics, particularly for smaller-scale developments, but it also establishes BESS as a recognised asset class and deal sub-theme in its own right.

Major players are already responding. Aboitiz Power Corporation has reported that it is constructing three BESS facilities co-located with its renewable assets, while ACEN Corporation is reported to be considering a PHP 30 billion stock rights offering in the second half of 2026 to fund over PHP 80 billion in planned capital expenditures toward a 5,000 MW operational capacity target.

Beyond sector-specific reform, a broader modernisation of government agencies is beginning to reshape the conditions for conducting M&A in the Philippines.

The Securities and Exchange Commission’s (SEC’s) Strategic Sandbox (StratBox) – established under Memorandum Circular No. 9, Series of 2024 – allows fintech companies to pilot innovative products – including digital assets, tokenised investment instruments, and cross-border trading platforms – within a supervised regulatory environment with relaxed licensing requirements during the testing period. For M&A practitioners, StratBox matters in two ways: it establishes a defined regulatory perimeter for target companies in emerging sectors, and demonstrates the SEC’s commitment to adaptive governance, facilitating industry-led growth in advance of formal legislation.

The SEC has moved decisively to online filing and credentialling. Through its Electronic Filing and Submission Tool (eFAST), the SEC requires corporations to submit online their annual reportorial requirements, including audited financial statements and general information sheets, as reinforced by SEC Memorandum Circular No. 1, Series of 2025.

Moreover, the SEC has rolled out the Electronic SEC Universal Registration Environment (eSECURE) under SEC Memorandum Circular No. 10, Series of 2024, which serves as a single, credentialled gateway to all SEC online services, including:

• eFAST;

• Electronic Simplified Processing of Application for Registration of Company, or eSPARC (for incorporation of new entities);

• Electronic Application for Modification of Entity Data, or eAMEND (for amendments of charter documents); and

• Electronic SEC Education, Analysis, and Research Computing Hub, or eSEARCH (main portal for access to corporate records).

The SEC’s digital ecosystem now mandates verified eSECURE accounts for all incorporators, directors, and signatories. By integrating digital identity checks with the SEC Zuper Easy Registration Online (ZERO) and Electronic Submission Authentication Portal (eSAP) systems, the SEC now allows for fully electronic authentication and signing, effectively replacing traditional wet-ink signatures and physical notarisation. The SEC’s digital transition has yielded three primary benefits for M&A: faster due diligence, the elimination of physical filing requirements, and a higher standard of data reliability. These improvements provide a transparent and verifiable audit trail for the regulatory filings, which are critical data points for any M&A transaction.

The PCC has likewise normalised electronic engagement through its Mergers and Acquisitions Office (MAO) E‑Notification system, an online facility where parties upload notification forms, responses to deficiency notices and information requests, and letters of non‑coverage. The system has become a core part of how merger reviews are conducted and managed, and it has helped introduce a more predictable, document‑driven review process for complex or cross‑border deals.

On the fiscal management side, a more concrete development has already taken shape. In January 2026, the Department of Information and Communications Technology rolled out the Digital Bayanihan Chain, a blockchain-based transparency portal that places the entire 2026 General Appropriations Act on a tamper-proof digital ledger, covering congressional approval, disbursement, expenditure, and reporting, in what government sources describe as the first fully on‑chain national budget globally.

For investors conducting due diligence on government counterparties, concessionaires, or project finance transactions linked to public infrastructure, the practical implication is significant: budget allocations and disbursements are now independently verifiable in real time, reducing a long-standing source of informational opacity in transactions where government fiscal commitments form part of the underlying credit story.

Beyond the energy sector, cross-border capital has not receded so much as it has become more selective. Investors continue to treat the Philippines as a pivotal market, as shown by Tokyo Gas’ investment in FGEN LNG Corporation, which underscores a commitment to critical infrastructure despite macroeconomic volatility. Similarly, Sembcorp Industries’ acquisition of the Puente Al Sol solar project reinforces the view that regional players see scope to scale renewables platforms in the country.

Local conglomerates also remained active in reshaping their portfolios. In the consumer sector, DoubleDragon Corporation’s acquisition of a strategic minority stake in MerryMart Consumer Corp. illustrated how the mandatory tender offer trigger under Rule 19 of the Securities Regulation Code can influence deal design and timeline, even when the underlying commercial objective is a strategic partnership rather than a full takeover.

In the real estate sector, the continuing use of property-for-share swaps of AREIT, Inc., the first real estate investment trust (REIT) in the Philippines, with Ayala Land showed how REIT structures can be used to recycle capital and deepen listed portfolios without relying on volatile equity markets.

The equity capital markets themselves were more subdued. With only two listings in 2025, Maynilad’s sizeable and ‘green‑labelled’ IPO served as the year’s defining transaction. With the Philippine Stock Exchange Composite Index (PSEi) down 7.29% from the 2024 closing and sentiment weighed down by governance concerns and weaker growth, many potential issuers opted to defer offerings or explore private M&A and REIT‑driven exits instead.

The Philippine M&A landscape in 2026 is expected to show a measured recovery anchored in the energy sector and supported by a regulatory environment that continues to move in investor-friendly directions.

Renewable energy will be the dominant deal theme. GEA-5’s offshore wind round will catalyse consortium formations and platform acquisitions as developers position ahead of subsequent auction rounds through GEA-9. The wider programme provides the kind of visible, multi-year deal pipeline that serious infrastructure investors need to commit capital at scale. Natural gas will play a growing supporting role: RA 12120’s framework, now supported by implementing rules, opens midstream and downstream gas to structured investment and project-level M&A of the kind that the Prime Infra transaction modelled in 2025. Nuclear energy remains a medium-term watch item, with the PhilATOM implementing rules expected to define what foreign investment in the sector looks like in practice, including what authorisations would transfer in an M&A transaction.

Challenges persist. Geopolitical tensions in the Middle East have driven global energy costs higher and placed renewed pressure on a country that remains heavily dependent on imported fuel. Peso volatility and US tariff uncertainty continue to weigh on cross-border deal financing, while local political risk tied to ongoing anti-corruption developments has not fully faded.

But the structural case for the Philippines remains compelling. The government has set ambitious energy targets and backed them with genuinely open ownership rules for renewables, a formal gas framework, and the beginnings of a nuclear regime. Regulatory agencies are modernising their processes in ways that will, over time, reduce the friction that has historically made Philippine deal timelines less predictable.

For investors willing to engage with the remaining complexity, the combination of policy clarity, long-term demand growth, and improving regulatory infrastructure positions the Philippines as one of the more strategically significant M&A markets in Southeast Asia heading into the next cycle.