A lot of people — especially expats — ask why the Philippines feels like it costs too much but delivers too little.
- Internet? Slow and overpriced.
- Electricity? Unreliable and expensive.
- Housing? Basic and tiny, but still feels like a luxury purchase.
Sure, it’s cheaper in dollars. But relative to income, it’s not cheap at all. In fact, it’s often more expensive than better-performing countries like Vietnam or Thailand.
The Short Answer? A Few Families Own Everything
In my opinion, a major reason why things feel this way is the dominance of a few powerful families in key sectors. This concentration of power leads to a lack of competition, which keeps costs high and service stagnant. These are some of the industries under their control:
Telcos
- Globe – Ayala family
- PLDT/Smart – Pangilinan group
- Sun – absorbed by PLDT
Energy
- Meralco – Pangilinan group
- SMC Global Power – San Miguel (Ramon Ang)
- Aboitiz – other major players
Real Estate
- Ayala Land, SMDC, Vista Land, Robinsons — the same group of families.
Banking
- BPI – Ayala family
- BDO – Sy family
- UnionBank – Aboitiz
These conglomerates don’t just have a large share of the market—they are the market. With little to no competition:
- There’s no pressure to lower prices.
- There’s minimal motivation to innovate or improve service.
- New players face huge barriers to entry (financial, regulatory, or political).
Cycle of Stagnation
- Oligarchs make huge profits.
- Reinvest in related sectors (or politics).
- Block or weaken potential competitors.
- Keep service quality just “good enough” to avoid outrage.
- Public gets frustrated, but change is slow because political and economic power are linked.
Sources to read:
Filipinos to remain at the mercy of oligarchs
Explainer: The oligarchy in the Philippines is more than just one family or firm
Cronyism, Oligarchy and Governance in the Philippines: 1970s vs 2020s
Blocked by Design: The Role of Regulation
So why don’t new players enter the game? Regulatory barriers play a significant role. The 1987 Philippine Constitution’s “60/40 rule” requires foreign investors to give up majority control in businesses to a local partner. While this was designed to protect local interests, it also stifles innovation and prevents more foreign investment, which has been a key driver of economic growth in neighboring countries like Vietnam, Thailand, and Indonesia.
In short: the structure is set up to keep the oligarchs in control. This means limited competition, stagnant services, and prices that only increase.
Sources to read:
60-40 Equity Rule on Owning a Business in the Philippines
Removing the Philippines’ 60-40 Rule Could Entice Investors But Also Destabilize the Status Quo
Even Food Is Affected
The Philippines is a country with a large agricultural base, but food remains expensive. Why?
- High Tariffs: Basic commodities like rice, meat, and vegetables are slapped with import duties. The idea is to protect local farmers—but…
- Inefficient Farming: The CARPER law broke land into smaller, less efficient parcels, reducing agricultural yields. Without mechanization, training, or economies of scale, most small farmers remain poor and inefficient. The Philippines produces less food at higher cost, and imports fill the gap—raising prices even more.
- Banking Constraints: Agri-Agra Law Mandates banks to allocate 10% of loans to agrarian reform beneficiaries and 15% to agricultural credit. Most banks prefer paying penalties rather than risking loans to a sector with poor yield, no collateral, and high default risk. This leaves farmers struggling, and food prices remain high.
Sources to read:
Comprehensive Agrarian Reform Program (CARP): Time to Let Go
Impact of access to land on food security and poverty: the case of Philippine agrarian reform
The “Township” Phenomenon: Corporate-Controlled Bubbles
Ever walk through BGC, Eastwood, Arcovia, or Nuvali and feel like everything’s too… polished? That’s because these “townships” are corporate-controlled developments that feel like anything but a real community. From condos to malls to restaurants, everything is owned by a single megacorp. You might live, work, and shop within these spaces, but they often lack authentic Filipino culture, mom-and-pop stores, and local history.
- You live in an Ayala condo.
- You work in an Ayala office.
- You shop at Ayala malls.
- You eat in restaurants owned by The Bistro Group, Moment Group, Raintree, etc. (most of them serving reheated Western/Asian fusion menus).
These aren’t cities — they’re branded bubbles.
In a sense, these are branded real estate projects masquerading as cities. It’s urban development, but it doesn’t feel like the Philippines.
Sources to read:
Transforming Philippine cities
Townships: The Next Big Thing for Philippine Real Estate
Bright Spots: Disruptors Pushing the Envelope
Despite the challenges, there are some positive changes happening in the Philippines. Some companies are fighting the status quo, especially in fintech and digital services where the old guard failed to innovate.
- GCash: A major disruptor in mobile payments, GCash made financial transactions easier for millions, including people who don’t have bank accounts.
- Maya: Formerly PayMaya, this company has evolved into a digital bank offering everything from savings accounts to crypto to credit.
- Tonik & SeaBank: These digital-only banks offer better interest rates and streamlined app-first services.
- Grab & Angkas: These services stepped in to fill gaps in transportation where government action was slow.
While these disruptors are few, they show that competition and innovation are possible — even in a system stacked against them.
Sources to read:
How GCash is Evolving to be a Global Fintech Powerhouse
Maya is the fastest-growing digital bank in the Philippines
What Needs to Happen Next
For the Philippines to catch up with neighboring countries, the system needs reform. Here are a few things I think could make a real difference:
- Constitutional reform: Allow 100% foreign ownership in key sectors.
- Remove artificial tariff barriers on imports
- Aggressive infrastructure push: Especially in agriculture, logistics, and digital.
- Real land consolidation + modernization: Let successful farmers scale and mechanize.
- Cut the red tape that stifles business growth
- Encourage urban development that includes a mix of local businesses and culture, not just big-brand shopping malls
- Open up markets to real competition, both local and foreign
- Political will to break oligarchic monopolies: This is the hardest, but the most important.
Conclusion: The Road Ahead
It’s clear that the Philippines isn’t lacking in talent, ideas, or potential. The issue lies with a system that has been built — and is maintained — by a small group of powerful families who benefit from keeping it the way it is. But as new disruptors continue to push forward and the public gets fed up, there may be hope for a better, more competitive future.
If the right changes happen, maybe — just maybe — the Philippines can start playing catch-up with its neighbors. But it won’t happen unless there’s a political will to make it happen.
Disclaimer: This article is an opinion piece based on my observations and research. The views expressed here are personal and do not represent the official stance of any organization or entity. The purpose of this piece is to foster conversation and awareness about economic and societal issues within the Philippines.
