Phl, Sweden ties remain strong

Next year, the Philippines and Sweden will celebrate 80 years of economic ties after the two countries established diplomatic relations in 1947.

Swedish companies remain positive about doing business in the Philippines. However, following Team Sweden’s recent business climate survey for this year, it appears that while Swedish firms remain optimistic, they are also a bit cautious and have expressed some concerns about corruption and their dissatisfaction over Customs procedures, lack of physical infrastructure and digitalization.

A survey undertaken by Team Sweden from February to April this year among 38 Swedish firms operating in the country indicated that they are cautiously optimistic about the business environment, with two thirds of those surveyed indicating plans to increase their investments in the next 12 months.

It was affirmed that the Philippines continues to present a fundamentally attractive growth market for Swedish companies, underpinned by long-term macroeconomic fundamentals, including a high growth trajectory and a large and young consumer base.

However, the Swedish companies survey identified digitalization, infrastructure improvement and ease of doing business reforms as critical priorities for enhancing competitiveness and the business climate.

In the Business Climate Survey for Swedish companies in the Philippines 2026 report, it was cited that “Customs is the single most challenging trade barrier faced by Swedish companies in the Philippines. In particular, respondents frequently cite difficulties related to customs procedures, which include lengthy processing times, complex documentation requirements and inconsistent enforcement regulations. These issues can cause delays in shipment and increase operational costs.”

The survey report further said “that larger companies, as well as those in the consumer goods sector, are more likely to report challenges related to customs procedures and regulations, reflecting greater exposure to customs and regulatory challenges. In contrast, smaller companies tend to highlight customs duties as a more immediate concern. Some have noted that streamlining fees could help reduce business cost and improve competitiveness.”

The survey report went on that “Companies also highlighted varying requirements imposed by local government units for permits, as well as frequent regulatory delays and complex procedures within government agencies, such as the Food and Drug Administration and Bureau of Internal Revenue.”

Digitalization and infrastructure, according to the survey report remain key reform priorities. “According to Swedish companies, a key priority area for reform to enhance the Philippines’ competitiveness and support economic growth is digitalization. Many respondents cite continued reliance on paper-based processes and fragmented administrative systems as key inefficiencies. This has become increasingly important in the context of recent operational adjustments across government agencies, including reduced on-site work arrangements in response to the recent increases in oil prices, with several institutions shifting toward hybrid and digital working arrangements. While this transition has created momentum for digital services, respondents emphasize the need to accelerate and fully implement digitalization measures to ensure efficiency.”

Lastly, the report said, “Respondents highlighted the importance of simplifying and reducing import and export documentation requirements. Current processes are often described as lengthy and burdensome, particularly when multiple agencies are involved. Some noted that delays linked to regulatory approvals, such as those from the FDA in food and beverage, as well as medicine and nutritional supplements, can further extend approval timelines. While respondents recognize the importance of maintaining high quality standards, they noted that EU compliance requirements are already stringent. In this context, easing regulatory procedures and reducing administrative bottlenecks could further improve trade processes.”

According to Anna Ferry, the ambassador of Sweden to the Philippines, “Our companies have a major role in enhancing the bilateral relations between Sweden and the Philippines. They are key partners in job creation and building a secure, resilient and prosperous economy.”

She thus emphasized the need for predictable implementation of policies from the national level down to the local government, and the implementation of digitalization.

Swedish companies have a strong and established presence in the Philippines, with most firms operating in the country for decades, alongside a growing number of new entrants in the last five years. The business footprint of almost 70 companies is also highly diversified across sectors, including retail, IT-BPO, life science, machinery and tech for industries, mining, energy, defense and digitalization, among others.

The survey shows that Swedish firms identify the Philippine work culture to be its greatest strength, followed by access to qualified local partners. Four out of five companies in the survey are expecting higher turnover this year than last year.

While companies continue to view the Philippines as a strategic growth market, they are more cautiously positive about the business environment compared to previous years due to regulatory inefficiencies and gaps in infrastructure. Corruption remains a significant concern for Swedish companies, particularly regarding interactions with government agencies. While most firms report limited direct exposure to bribery or fraud, the 2025 corruption scandal involving public infrastructure projects negatively affected investor confidence and business sentiment. Companies identified digitalization, infrastructure improvement and ease of doing business reforms as critical priorities for enhancing competitiveness and the business climate.