Investment pledges expected to be ‘sluggish’ due to Iran war

SLUGGISH investment activity is expected to be one of the consequences of the fighting in the Middle East, Trade Secretary Ma. Cristina A. Roque said.

Speaking to reporters late Monday, Ms. Roque said investment will “definitely… be affected” because of the crisis. “Everything will be at a stand still.”

“If this continues, we expect sluggish (investment pledges,)” Ms. Roque added.

When asked if the government is ready to amend its export and investment approvals targets, she said: “Definitely, we will have to meet regarding that… But for now, our main priority is to maintain food prices… to at least keep them stable.”

The DTI (Department of Trade and Industry) was projecting BoI (Board of Investments) investment approvals of P1 trillion this year, which falls below the P1.75-trillion target in 2025.

BoI-approved investments hit P1.56 trillion last year, falling short of the 2025 target and 4% lower than the record P1.62-trillion 2024 approvals.

One possible offsetting factor could be renewable energy (RE) investments, which could receive a boost from high oil prices, Ms. Roque said.

“(We expect a) jumpstart from RE pledges (and) electric vehicles,” she noted.

According to the BoI data, the energy industry, which includes RE, accounted for the largest share of approved investments at P22.4 billion, or 47.7% of the total, in the first two months of 2026.

In the first two months, the BoI approved P47 billion worth of investments for 35 projects, up 338% from a year earlier.

The DTI is assigning a lower priority to foreign travels to attract investment, Ms. Roque said, adding that “making sure everything is stable here” is the top agenda item.

On the export side, the target was set at between $110.8 billion and $113.4 billion this year, according to government estimates, downgraded from the previous target of $163.6 billion.

Last year, exports rose 15.2% to $84.41 billion in 2025 from $73.27 billion in 2024.

John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said the ongoing war in the Middle East may dampen investor sentiment in the coming months. 

“We may see some moderation or normalization in approvals in the coming months, rather than a sharp slowdown,” he said via Viber.

Despite external uncertainties, investments in strategic sectors like RE are likely to stay resilient, Mr. Rivera added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said global trade disruptions could weigh on the growth of exports and investment approvals.

“Since some FDIs (foreign direct investments) are export-oriented; foreign investment approvals could slow down as well to adjust to the weaker demand in the Middle East and other parts of the world,” he said via Viber. — Beatriz Marie D. Cruz