Joseph Bergin
Head of Equity Investment, Asian Development Bank
Institutional capital continues to shape the Philippine M&A landscape, with governance, scalability, and long-term sustainability moving increasingly to the forefront of investment decision-making. Development-oriented investors play a critical role in channeling capital into sectors that deliver not only commercial returns but also address structural gaps in infrastructure, financial inclusion, and essential services.
The Asian Development Bank’s (ADB) Private Sector Operations Department (PSOD) spearheads equity and debt investments across developing member countries in Asia Pacific, underpinned by a mandate anchored in inclusive growth and measurable development outcomes. In the Philippines, ADB Equities has been active across the infrastructure, financial services, and sustainability-linked sectors. Joseph Bergin, Head of Equity Investment, shares his views on today’s attractive opportunities and the themes likely to shape activity in the year ahead.
What key characteristics currently define attractive M&A opportunities in the Philippine market, particularly regarding governance, scalability, and long-term sustainability?
As a development finance institution, our mandate is to invest in opportunities that support developing member countries. We focus on sectors where businesses address clear developmental challenges and demonstrate scalability.
At the company level, we prioritize management teams committed to strong corporate governance. This begins with formal policies and mechanisms that promote transparency, accountability, and ethical conduct. While not all companies initially meet world-class governance standards, we look to partner with businesses willing to strengthen their practices. Institutional investors like ADB aim to collaborate with those open to elevating governance to global best practice.
Reflecting on developments over the past year, which shifts in the Philippine investment landscape stand out most?
What stood out most was the noticeably cautious tone among foreign investors towards the end of the year. While the Philippines remains an attractive market with solid long-term growth potential, lingering economic and political uncertainties have prompted a more measured stance. This was evident in both market performance and Philippine Stock Exchange (PSE) trading activity, with the 2025 index closing at a lower level than in 2024.
We remain optimistic that as confidence improves gradually, the country’s strong fundamentals and ongoing reforms will bolster investor sentiment.
Looking ahead to 2026, which themes or sectors will be most critical in shaping M&A activity, particularly from the perspective of development-oriented and institutional capital?
Much of the country’s recent M&A activity has focused on infrastructure—transportation, power, telecommunications, water—and we expect this sector to remain critical as significant capital is required to keep pace with population and economic growth.
For example, ADB was a cornerstone investor in Maynilad’s IPO in November, supporting much-needed improvements to water infrastructure in the National Capital Region.
Another promising area is financial services, with financial inclusion remaining a key theme. Traditional banks have targeted the most bankable clients, but innovations such as broader digital payments adoption, the national ID system rollout, and regulatory reforms create opportunities to reach underserved segments. We are already seeing active investment across digital banking, lending, and payments, and expect this momentum to continue in 2026.
What advice would you offer to corporates and investors pursuing M&A in the Philippines today?
We see commercial objectives and broader development impact as fundamentally intertwined, especially in emerging markets. The key is grounding commercial goals in a deep understanding of structural gaps in access, affordability, and quality of essential services. Addressing these gaps reinforces commercial returns.
For investors, this means explicitly assessing these factors during due diligence—not only as impact indicators but also as measures of long-term demand. Approaching opportunities with this lens should reveal high-potential segments where investors can deliver both economic and development outcomes.
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