The Philippines has fallen to 18th place out of 25 emerging markets in Kearney's 2026 Foreign Direct Investment (FDI) Confidence Index, marking its third consecutive year of decline. With a score of 1.4635, the country trails behind regional peers like Thailand, Malaysia, Indonesia, and Vietnam, which are benefiting from supply chain shifts and stronger innovation. Factors contributing to this downward trend include recent headlines around infrastructure spending, political challenges, and a corruption scandal, alongside a more risk-averse global investment climate. FDI net inflows to the Philippines decreased by 17.1% in 2025 to $7.791 billion, the lowest since 2020, and continued to slide in early 2026. While investors acknowledge the Philippines' strengths in labor talent, natural resources, and economic performance, weaknesses in innovation ecosystems, bureaucratic complexity, and infrastructure persist.