[Vantage Point] JAZA’s painful question: Why aren’t we winning?

• The Philippines risks being left behind in global investment due to fundamental issues in talent, infrastructure, energy, regulatory environment, and institutional stability, as highlighted by Jaime Augusto Zobel de Ayala.
• Foreign direct investment in the Philippines has declined significantly, and while ASEAN countries are attracting capital, the Philippines must address its weaknesses to remain competitive.
• The real competition lies not among local companies but between the Philippines and other countries, emphasizing the urgency for the government and businesses to collaborate on improving the country's foundational issues.

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Global capital is moving, but the Philippines risks being left behind. Jaime Augusto Zobel de Ayala’s warning on talent, infrastructure, energy, regulatory environment, and institutional stability exposes a harder truth: unless the country fixes the fundamentals, the next wave of factories, data centers, and supply-chain investments may simply go elsewhere.

There was one line in the speech delivered by Jaime Augusto Zobel de Ayala (JAZA) before the Makati Business Club (MBC) last Thursday, October 15, that should have made every policymaker in the room cringe.

As global companies diversify their supply chains, he said, Philippine businesses should stop worrying only about which company, industrial park, or industry captures the next investment. The more important question is whether the Philippines itself is winning.

I would take him literally.

JAZA effectively handed us a five-part due-diligence checklist for the country: talent, infrastructure, energy, regulatory environment, and institutional stability. These are precisely the factors a multinational corporation would examine before committing billions to a factory, semiconductor facility, data center, or regional headquarters.

Let’s put his question to the numbers. Start with the outcome that ultimately matters: investment. 

Foreign direct investment flowing into the Philippines fell 23.9% to US$4.071 billion in the first seven months of 2026, according to the Bangko Sentral ng Pilipinas (BSP) report cited in Zobel’s speech. 

At about the same time, a participant in the Jefferies-Regis Partners Philippines Conference reportedly observed that fewer foreign investors than expected had traveled to Manila. Neither statistic proves that investors are abandoning the country, but both give JAZA’s question greater urgency.

The uncomfortable part is that the Association of Southeast Asian Nations (ASEAN) itself is not starved of investment. Supply chains are being rearranged, semiconductor ecosystems are expanding, data centers are multiplying, and global companies are still looking for places to deploy capital. The issue is not whether money is moving. It is whether enough of it is moving here.

Take talent, the first item on JAZA’s checklist. The Philippines has the demographic story investors like to hear: a young population and a large working-age labor force. But demographics are not the same as human capital. 

In the latest Program for International Student Assessment (PISA) of the Organisation for Economic Co-operation and Development (OECD), only 16% of Filipino 15-year-olds reached basic proficiency in mathematics, compared with 72% in Vietnam. That gap matters more because artificial intelligence raises the value of higher-order skills and threatens to automate many routine service jobs.

Infrastructure is less disastrous, but hardly a decisive advantage. In the latest Logistics Performance Index of the World Bank (WB), the Philippines scored 3.3, roughly level with Vietnam, ahead of Indonesia but below Malaysia and Thailand. That suggests that our logistics system is serviceable, but not strong enough to offset weaknesses elsewhere.

This is why JAZA’s warning about accountability matters. He said infrastructure must not merely be built. The right projects must be built well, with every project and peso fully accountable. A peso wasted on bad infrastructure produces two losses: taxpayers lose the money, and businesses fail to receive the roads, ports, and transport systems that could have improved competitiveness.

Then comes energy, where the disadvantage becomes much harder to ignore.

Using a common benchmark for large business users, Philippine electricity costs about US$0.153 per kWh in March 2026, versus $0.119 in Thailand, $0.116 in Malaysia, $0.081 in Vietnam and $0.062 in Indonesia. That puts Philippine power almost 89% above Vietnam’s and about 147% above Indonesia’s. (READ: Cheaper PH electricity? Go beyond system loss; fix costly power contracts)

A semiconductor plant or hyperscale data center does not care about the reasons electricity is expensive. It puts the number on a spreadsheet and calculates what operating here will cost over the next decade.

Regulation and institutional stability, meanwhile, are less about headline rankings than predictability. The Philippines sits roughly in the middle of its regional peers on formal regulatory quality measures, but capital does not price rules in isolation. It prices uncertainty — shifting policies, unpredictable permits, inconsistent interpretation of contracts, and institutions whose credibility changes with personalities.

That uncertainty carries a cost.

Investors can model wages, freight, and electricity. What they find much harder to model is whether the rules of the game will still look the same five or ten years from now.

Seen together, the numbers explain why I found Zobel’s speech more unsettling than inspirational.

The Philippines does not fail every test. Our logistics performance is respectable, and our regulatory environment is not uniquely worse than those of all our neighbors, which makes  the situation more frustrating.

Where we are weak, the weaknesses are fundamental: the quality of future workers and the price of the electricity that future industries will consume.

These are not problems a tax incentive can permanently hide.

JAZA’s broader point was that Philippine conglomerates can continue competing fiercely for customers, employees, capital, and foreign partners, while recognizing that no single corporation can fix education, national infrastructure, energy policy, or institutional credibility.

That requires government and business to work on the foundations together.

And this is where JAZA’s deceptively simple question becomes uncomfortable. The Philippines has spent decades discussing expensive power, weak education, infrastructure gaps, regulatory friction, and governance. None of these problems is newly discovered.

The diagnosis has never really been our biggest problem.

Execution has.

That is also why his call for accountability deserves more attention than it received. Infrastructure spending does not make a country more competitive merely because billions appear in a national budget. 

Education does not improve because classrooms are built. An energy policy does not become successful because a generating capacity is announced. Regulation does not become investment-friendly simply because agencies promise faster approvals.

What matters is whether these systems deliver results.

The Philippines still has advantages that many countries would gladly trade for: a young population, English-language capability, geographic proximity to major Asian supply chains, a long-established electronics sector, and access to a rapidly growing ASEAN market.

But potential has an expiration date.

Supply chains being redesigned today will not wait indefinitely for us to fix electricity prices. Semiconductor investments awarded elsewhere do not create supplier networks here. Data centers built in neighboring markets create ecosystems there. Workers displaced by artificial intelligence cannot simply wait for an education system to catch up ten years from now. (READ: Building a ‘Silicon Valley in Tarlac’? Manny Pangilinan wants in.)

Capital moves before governments are ready.

Consequently, we may have been focusing on the wrong competition.

The real contest is not Ayala versus Aboitiz, one industrial estate against another, or one Philippine company trying to land the next multinational investor.

The real contest is between the Philippines and everyone else.