MANILA, Philippines –Swedish firms are more willing to expand investments in the Philippines than anywhere else globally, a new business climate survey showed, despite lingering concerns over corruption and governance.
In its 2026 Business Climate Survey, Team Sweden in the Philippines found that 63 percent of Swedish firms plan to increase investments in the country over the next 12 months.
READ: Philippines eyes Swedish investments in energy, digital technology
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The share of firms planning to expand investments surpassed the 21 percent that expect no change and the 8 percent considering cuts or an exit. It also improved from 55 percent in the previous survey.
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As a result, the Philippines emerged as the most investment-attractive market among 41 economies, ahead of regional peers India and Vietnam despite their stronger overall business climate ratings.
Reflecting this optimism, 66 percent of Swedish firms reporting profits over the past year, up from 55 percent previously.
Even so, Swedish companies adopted a more cautious view of the Philippine business environment.
Only 31 percent of respondents rated the local business climate as good or very good in 2026, down from 41 percent a year earlier. Meanwhile, the share of companies with a poor or very poor assessment rose to 25 percent.
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Due to strong work culture
Overall, the Philippines scored 3.1 out of 5 in the survey, reflecting what Team Sweden described as a “positive but cautious” outlook and placing the country just below the global average score of 3.2.
Swedish firms remain drawn to the Philippines for its work culture and business mindset, followed by access to skilled talent and strong local supplier network.
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“The Filipino team’s ‘can-do’ attitude has made a measurable difference in turning ambition into results,” said Ricardo Pinheiro, the country retail manager of Swedish-founded furniture giant IKEA.
Johan Lennefalk, trade commissioner of Sweden to the Philippines, said Filipino workers are also highly regarded by Swedish firms for their strong English-language skills and ability to integrate into global teams.
“Even though the Philippines is very far away, to have a team here works very well in terms of managing teams and the local culture,” Lennefalk said.
Corruption perception ‘heightened’
Despite the upbeat investment outlook, corruption remained a concern among Swedish businesses, particularly larger firms.
While corruption concerns rose after a major 2025 graft scandal, most firms said they had little direct experience with bribery or other irregular practices.
Sweden Ambassador to the Philippines Anna Ferry acknowledged that corruption-related controversies over the past year had weighed on sentiment, on top of broader global challenges such as geopolitical tensions, conflicts and higher energy costs.
“The corruption scandal last year has also weighed on investor and consumer confidence. That is why I would like to stress that the government reforms that are undertaken by the Philippine government and these efforts are of utmost importance to all companies in this country,” Ferry said.
There are 105 Swedish companies operating in the Philippines, more than half of which are located in Metro Manila. Together, they account for an estimated 19,700 jobs.
Most Swedish firms in the country are involved in packaging, materials and manufacturing, followed by engineering, infrastructure and construction technology, digital, software and telecommunications, and consumer, retail and lifestyle businesses.
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The survey, which covered more than 2,250 respondents worldwide, polled 38 Swedish companies in the Philippines. /pai INQ