SWEDISH companies in the Philippines remain cautiously optimistic, but sentiment has softened this year, weighed down by governance concerns, corruption fears, and rising costs linked to the Middle East conflict, according to the Business Climate Survey (BCS) 2026.
The survey, released Tuesday, was conducted by Business Sweden and the Swedish Embassy in the Philippines from February to April, gathering responses from 38 Swedish firms across industries including IT-BPO, manufacturing, and retail.
The share of firms rating the local business climate positively dropped to 31 percent from 41 percent a year ago, with 44 percent neutral, and 25 percent rating it “poor.”
The Philippines scored 3.1 out of 5, just below the global average of 3.2.
Sweden Trade Commissioner Johan Lennefalk attributed the softening largely to last year’s corruption scandal involving flood control infrastructure projects.
“People read that in the news and feel uncertainty and hesitation to make decisions,” Lennefalk said.
Other drags on sentiment included concerns over infrastructure, corporate taxation, customs processes and digitalization.
Corruption remained a key concern, with 26 percent of respondents reporting direct exposure involving government agencies, though 63 percent said they had limited experience of bribery or fraud.
Despite the gloomier mood, investment intentions strengthened. Some 63 percent of Swedish firms plan to increase investments in the Philippines over the next 12 months, up 8 percentage points from 55 percent last year.
Meanwhile, 83 percent expect positive turnover in the coming year, and 66 percent reported remaining profitable in 2025.
Filipino talent was cited as a top draw, with respondents highlighting a “can-do” attitude, high English proficiency, and familiarity with Western business practices as factors that ease integration with Swedish corporate culture.
Companies identified digitalization, infrastructure development and ease-of-doing-business reforms as the most critical priorities for improving the country’s competitiveness.
Prominent Swedish brands operating in the Philippines include home furnishing company IKEA, audio streaming service Spotify, clothing store H&M, auto manufacturing firm Volvo, telecoms company Ericsson, pharmaceutical firm AstraZeneca, technology corporation ABB, and industrial company Atlas Copco, among others.
