Top Industries to Watch in the Philippines (2025-2026 Update)
Berns San Juan: Today we’re talking about the top industries to watch out for in the Philippines. Let’s do a quick rewind through recent years and look at where we’re headed in 2025-2026.
A lot of people might not know, but the Philippines has been consistently one of the fastest-growing economies in Southeast Asia. While we’re not always cheerleaders for our own country, I think we should take our victory laps where we can. The Philippines has maintained strong growth rates, positioning itself well for continued expansion through 2025-2026.
The growth is attributed to a lot of us adapting to the new normal. There has been a resumption of commercial activities. There is more spending on public infrastructure. There is a lot of growth in digital finance services, and a lot of sectors grew with transportation and storage, construction, and financial services being the best performers overall.
There’s no success story though, like this is a very nuanced story. We cannot ignore the fact that despite strong GDP improvements, we also need to watch inflation. But with inflation moderating and the government aiming for sustained 5-6% growth, the outlook looks optimistic.
Well, welcome to another episode of the Truelogic DX Podcast. My name is Bernard and let’s dive into some of the key industries to look out for in the Philippines alongside the projected expansion, the projected trends, the projected perception that the market will have for them, and some business opportunities for you because I’m assuming you are a productive decision-making member of society.
Financial Services Industry
The first industry that I wanted to highlight is the financial services industry. For a very specific reason, they are the third largest industry in the country. A lot of people are not aware that the financial industry is over two trillion pesos in revenue—and that’s in one year alone. The margins in the industry are pretty respectable, about 38.2% in terms of net profit compared to revenue. That’s pretty high for an industry.
Financial services has shown strong growth rates over recent years, with banks, insurance companies, online banking, and e-wallets all contributing to this growth. The sector is probably still going to see a pretty decent amount of growth, somewhere between 5% to 7%.
Financial inclusion and more digitalization are major contributors to growth in this sector. The Bangko Sentral has been easing limits on new players, allowing more unbanked people to be part of this industry. Banking penetration has improved dramatically, with the proportion of Filipino adults with real bank accounts increasing significantly over the past few years.
Businesses in this sector will need to remain vigilant in terms of navigating security and fraud risk. As the sector grows, vigilance against fraud becomes even more critical. For financial institutions looking to expand their digital presence, having a strong SEO strategy is essential for capturing the growing number of customers searching online for banking and fintech solutions.
Energy and Power Industry
This is the fourth largest industry in the country and accounts for a whopping one trillion pesos in terms of revenue industry-wide. The potential to grow in this industry is about 7%, but that can go all the way up to 12% as the country focuses on renewable energy generation.
High global inflation and the fact that the Philippines is a net fuel importer do impact electricity prices. This is part of the reason why the growth in revenue is also higher—not necessarily from more generation and distribution, but also from increasing electricity rates.
There are some moves being made—recent regulatory easing to encourage exploration and development of energy resources. Utilization of renewable energy resources could accelerate the growth in the country’s energy and power sector. This is probably how they break the 7% floor and grow faster. Energy and power remains one of the top industries to watch through 2025-2026.
Wholesale Trade and Consumer Retail Industry
Now, let’s talk about something nearer and dearer to me, probably also nearer and dearer to you. The wholesale trade and consumer retail industry is expected to be stable through 2025-2026 at 4% for wholesale trade and 5% for retail, respectively. Inflation will continue to put consumers under pressure, but commodity prices are expected to moderate.
In response to challenging economic conditions, 92% of consumers have changed their shopping behaviors. A lot of this is being felt by luxury brands while mainstream brands and retail providers that offer promotions are benefiting. For retail businesses, understanding the Philippine digital economy landscape is crucial for capturing online shoppers.
Manufacturing Industry
This is the leading industry in the country in terms of revenue—by a mile. Manufacturing accounts for almost 5 trillion in aggregate revenue. Despite the slowdown during COVID, they made a rapid recovery, growing at over 17% year on year. That’s an impressive growth rate.
Manufacturing is a key contributor to the Philippine economy, which makes sense at this stage in our development. It is still 19% of the GDP of the country and employs about 7% of the eligible labor force. It grows in line with GDP year on year at about 6-7%.
The Philippines is also likely to benefit from increasing geopolitical tensions. As Western countries and US allies near-shore and friend-shore, we are likely to become beneficiaries of those policies because other countries are looking to make their supply chains more resilient.
People might not be aware but 45% of Philippine exports are not coconuts and mangoes—they’re semiconductors. We import raw materials to produce semiconductors and 45% of Philippine exports are semiconductors. More investments into STEM capabilities in the country could help attract investment and development into this sector.
IT-BPO Industry
The IT-BPO industry is on track to reach its long-term targets. The sector forecasts revenues of approximately $40 billion for 2025-2026, which is consistent with growth trends from previous years. The IT-BPO sector is almost always roughly 9-10% of the country’s GDP.
I think we were a net positive recipient in terms of the benefits from the shift to remote work. Kudos to PLDT, Converge, Smart, and all of the other internet service providers. We would have never been able to pull off the transition to hybrid work without improved internet infrastructure.
The industry continues to outperform headcount and revenue targets. It should be no surprise that the majority of employment in the IT-BPO sector is in the millennial generation. These millennials employed in the IT-BPO sector account for nearly 60% of all e-commerce activity.
The millennials are also the fastest-growing middle class in the country. Unlike developed countries where economists say millennials may never become wealthier than their parents, that’s not true here yet. A lot of their prosperity is thanks to the growth in this industry.
Demand from global companies for offshoring is expected to still increase due to cost optimization strategies and preference for Philippine IT-BPO services. New work setups continue to emerge—the IT-BPO sector has proven to be very flexible when it comes to work arrangements, allowing for remote-first, in-premise, and hybrid setups.
It is increasingly becoming more important that the IT-BPO sector adapts to new technologies as businesses begin to harness automation and generative AI to unlock productivity. Companies that embrace digital marketing trends will be best positioned to capture market share in this evolving landscape.
Real Estate Industry
I want to give a special mention to the real estate industry. If you look at it pound per pound, the real estate industry is only the seventh largest industry in terms of revenue, accounting for about half a trillion. However, even though it is the seventh by revenue, it is the third by profit.
There are only two industries that beat it by profit—financial services (which has very respectable margins) and manufacturing (which has a lot of profit simply because of scale). By margin, real estate is the most profitable sector, boasting margins of up to 43.8%.
Implication for Businesses
The takeaway I’d like you to leave with from this conversation is that if you are in B2B, these are your potential audiences, your potential customers. They are the ones with deep pockets, they’re not experiencing recessions, they’ve got great prospects.
In the financial services industry, these guys are great clients. They’ve made great strides since 2015-2016 to become digital, to get closer to their customers. They’re not relying so much on in-branch staff to provide the maximum value. So if you’re a B2B provider, great industry to service. If you are an individual, great industry to work for.
Energy and power is the fourth largest industry in the country. If you’re not working on the labor side, it would be great to become part of these companies—even retail power generation and companies selling photovoltaic and batteries. While power generation in the country grows only by 4-5%, revenue in the industry grows by about 7%.
Consumer and retail is one of the faster-paced industries in the country. Working for the retail arm of major conglomerates or brands that build their presence online is an exciting opportunity. For retailers looking to strengthen their digital presence, a robust social media marketing strategy is essential.
Manufacturing offers steady work and a secure industry. Our majority of exports are semiconductors, not agricultural products. And if you’re family, like if you want to be employed and want steady work in a secure industry, this is a great vertical to be in.
Last, IT-BPO is a great industry. If you’re in it, don’t be a jumper. You’re in a great vertical that offers a lot of potential for growth, contributes about 10% to the GDP, and allows you to participate in the economy. These guys are not limited by the economy of the country—IT-BPO services Australia, the US, UK, and Asian markets. They’ve got a near-infinite market.
With that, I want to thank you for joining me on this episode on the industries to watch out for in 2025-2026. The Truelogic DX Podcast is available on Spotify, Google, and Apple accounts. Let us know if you have any comments or any topics you’d like us to discuss in the future.
