Why is Vietnam’s economy growing faster than ours?

The well-attended reception celebrating the 81st anniversary of the Socialist Republic of Vietnam was full of diplomats, business leaders and friends of Vietnam. The size of the gathering was impressive, but what really resonated with me was the unmistakable confidence of a country that knows where it wants to go – and intends to get there quickly.

I have followed Vietnam’s progress for many years, yet I was still surprised by the scale of its economic ambition. Measured in nominal dollars, Vietnam is still roughly a half-trillion-dollar economy. But in purchasing-power terms, it has already crossed the trillion-dollar mark, and its leaders are openly pursuing double-digit growth and developed-country status by 2045. It is no longer merely an emerging market selling garments and footwear – it is becoming a major manufacturing, electronics and technology center.

The World Bank says Vietnam’s economy expanded by eight percent in 2025, the fastest in ASEAN, supported by exports and public investment. Despite global uncertainty, its growth momentum remains among the strongest in the region. Samsung, Intel, Foxconn and other international companies have made Vietnam an essential part of their production networks. Foreign-invested enterprises account for about 70 percent of its exports.

Vietnam’s advantage is not that it has no problems. It faces expensive infrastructure demands, energy constraints, an aging population, climate threats and the risk of depending too heavily on exports. Its political and economic systems are also very different from ours. We should not pretend that everything Vietnam does can or should be copied by the Philippines.

But one lesson is difficult to dispute: when Vietnam decides that an investment is strategically important, its government moves with urgency. Investors are given a clear signal about priorities, incentives, land, infrastructure and timelines. Government agencies are expected to coordinate rather than compete. When the global minimum tax threatened to reduce the value of traditional tax incentives, Vietnam worked on an investment support fund to help qualified high-technology projects with infrastructure, fixed assets and worker training. It did not simply complain that the rules had changed – it adjusted its offer.

That decisiveness shows in the numbers. According to the ASEAN Investment Report cited by the Asian Development Bank, Vietnam received about $20 billion in foreign direct investment in 2024, compared with $8.9 billion for the Philippines. We remain one of Asia’s faster-growing economies, but red tape, high electricity costs and weak infrastructure continue to hold us back. These are not new discoveries. Investors have been telling us the same things for years.

The Philippines has many advantages Vietnam would gladly have: a young, English-speaking workforce; a strategic location; rich mineral resources; democratic institutions; deep cultural ties with the United States and a large domestic market. We have passed important reforms and created attractive incentives. President Ferdinand Marcos Jr. has personally worked hard to bring major investors to the country. Our economic managers know what must be done.

Yet problems often begin after the announcements. A prospective investor hears strong assurances at the top, then encounters overlapping permits, changing interpretations, slow local approvals and agencies that don’t share the same timetable. Capital is patient only up to a point. A billion-dollar factory cannot wait indefinitely while papers travel from desk to desk. When another country can offer a credible decision, serviced land, reliable power and a firm schedule, the investment goes there – and so do the jobs, technology and supply chains.

The emerging Pax Silica initiative makes this competition even more urgent. Led by the US, Pax Silica seeks trusted and resilient supply chains for the age of artificial intelligence – from critical minerals and energy to semiconductors, data infrastructure and advanced manufacturing. The Philippines is already positioned within this effort, with Clark and our mineral resources offering enormous possibilities. Vietnam has also made clear it is ready to participate.

We should welcome Vietnam’s interest. Pax Silica should not be viewed as a contest in which one ASEAN neighbor must lose for another to win. Secure supply chains require several trusted locations. The real question is whether each country can convert diplomatic alignment into factories, laboratories, power projects, training programs and employment.

Vietnam will arrive at the table with a powerful proposition: scale, speed, manufacturing experience and disciplined execution, while the Philippines offers talent, resources, strategic geography and one of America’s strongest alliances. On paper, our hand is excellent. But investors do not place billions of dollars on paper advantages. They invest where decisions become permits, where permits become construction and where construction begins on time.

We should therefore establish a true fast lane for strategic investments – not another committee, but a single empowered mechanism with fixed deadlines and accountable officials. Incentives must be competitive, but certainty is often the greatest incentive of all. Power, ports, roads, digital connectivity and skilled workers must be prepared before investors ask for them. And once the President gives the green light, the rest of government must move in the same direction.

At Vietnam’s anniversary reception, the atmosphere was celebratory, but the underlying message was serious. Eighty-one years after independence, Vietnam is not looking backward. It is measuring the distance to its next factory, its next technology hub and its next stage of national development.

Filipinos should admire that achievement without becoming discouraged. The Philippines can move just as fast, and perhaps even faster. But opportunity does not wait for bureaucracy to finish deliberating. In the race for investment, countries that decide today build tomorrow. Those that delay might one day discover that tomorrow has already been built somewhere else – in the end, it’s our children’s future that may be gone forever.

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