Emerging markets in Asia have long been a focal point for global investment and development, with their potential growth, structural reform and cultural exchange promising smoother pathways for overseas partnerships. While the largest economies in Asia dominate international news, they should not overshadow their up-and-coming ASEAN (Association of Southeast Asian Nations) peers, which are at different stages of development but possess immense potential for business and related legal services. 

If ASEAN were one economy, it would be the third largest in Asia and the seventh in the world, with a combined GDP of about $2.6tr. Many of its constituent markets – including the Philippines, Vietnam, Indonesia, Malaysia, Thailand and Singapore – have continued to grow over the past five years in the face of global economic challenges, driven by robust domestic demand, government spending and the ongoing recovery of the services sector. 

Nowhere is the ASEAN opportunity greater than in the Philippines. A rising star in the region, the Philippines boasts the world’s fifth-fastest-growing economy, with a GDP of $435.68bn and a population of 114 million. The country’s economic outlook is bright, with projected GDP growth of 6% in 2023, compared to 4.7% for the rest of Southeast Asia. And with extensive government investment via the ambitious Build Build Build infrastructure programme, the stage is set for the Philippines to attract higher levels of foreign direct investment and global participation in the local economy. Demand for legal services to support this activity is also surging, both for Philippine clients looking to expand internationally and those seeking to enter the market from abroad. 

A growing ASEAN player  

Strategically located with maritime borders connecting it to Taiwan, Japan, Indonesia, Malaysia, Vietnam and China, the Philippines plays a crucial role in global trade. Approximately 30% of global maritime traffic traverses the waters surrounding the Philippines. Furthermore, the presence of more than 400 special economic zones underscores the Philippines’ commitment to fostering economic development and foreign investment.

Notably, Philippine companies are expanding into the global economy – setting up operations and services in diverse sectors, including energy, infrastructure, consumer goods, pharmaceuticals and technology. Examples include ACEN (the listed energy platform of the Ayala Group), ICTSI (a leading international terminal operator) and Shakey’s Pizza Asia Ventures (a growing publicly traded restaurant company). In March 2023, the Philippine Franchise Association (PFA) set a target to have 50 Filipino franchise brands operating globally over the next three years. This outward expansion mirrors the global reach of companies and law firms alike, positioning the Philippines as a strategic hub for both regional and international business.

Since 2021, the Philippines has implemented several economic reforms to increase market competitiveness and promote foreign investment. Last year, the government amended its Public Service Act (PSA) to grant “full foreign ownership in certain public infrastructure sectors, including airports, railways, expressways and telecommunications”, and in 2022, it allowed “100% foreign ownership in the renewable energy sector”. With reforms like these promoting a favourable business climate and a positive economic outlook, the Philippines is attracting foreign companies, including Amazon and UPS, that are looking to expand their business and tap into a growing market. 

Beyond its economic potential and steady growth and long-term economic potential, the Philippines exemplifies key aspects of globalisation that are of increasing importance to those looking to invest. Its young and educated English-speaking population, with exposure to international trends, culture and societal momentum, serves as another competitive advantage for businesses seeking a forward-thinking workforce, capable of meeting the needs of international clients and peers.

Where opportunities abound, demand follows

As business needs increase so will demand for broader-reaching legal services. For firms entering new markets, such as the Philippines, it’s important to understand that what might be common practice in one country can be quite novel in another. PJS Law has helped many clients navigate these new frontiers, including obtaining the first-ever digital banking license in the Philippines and, as a result, paving the way for the country’s central bank to establish comprehensive regulations and protocols. Using innovative, out-of-the-box thinking will be vital for law firms counselling clients entering this evolving market. 

ASEAN is expected to remain one of the fastest growing regions of the world over the decade ahead, with the Philippines joining the ranks of the world’s largest emerging markets by 2035. ASEAN is not a monolithic market, but its rich diversity, desire for growth through self-investment and homegrown legal talent combine to make it one of the most interesting regions in the world for investment and expansion. The opportunity in the Philippines is especially important, and law firms will play an instrumental role in helping domestic and international clients grow along with this dynamic market for years to come.

Elliott Portnoy is global CEO of Dentons and Regina Jacinto-Barrientos is co-founder and CEO of Philippine law firm PJS Law. The previously announced combination between their two firms officially launched today (5 February).