The Philippines may be enduring a sluggish first-half economic acceleration, but it still has a few good cards to play. Global bank HSBC sees renewables and AI data centers as juicy “sweet spots” that could lure billions in foreign capital, giving the economy a real shot at turning a growth hangover into a comeback party.

That was the central message from HSBC executives, government leaders, and business movers at the recent “Philippines Forward: Building the Future, Accelerating Growth” Business Summit at Shangri-La Fort, BGC. During a sit-down with journalists, HSBC executives doubled down on their assessment: while the Philippine economy may be losing steam, its next growth engines are already in place. What matters now is firing them up with capital, policy reforms, and decisive execution.

HSBC Philippines CEO and Head of Banking Sandeep Uppal noted that foreign investors are already putting hard cash where the country’s energy future is headed: renewables.

“What’s apparent is that in certain sectors, there’s strong interest as well as actual investments coming through—for renewables. So clearly, a lot of investments are going there, meaning there’s real money coming from overseas investors,” he stressed.

The money trail tells the story in hard numbers: renewables dominated the Philippines’ investment map in the first half of the year, hauling in ₱343.47 billion—a hefty 74.25 percent of the ₱461.84 billion in total investments reported by the Board of Investments (BOI).

HSBC Chief Asia Economist Frederic Neumann similarly highlighted that while the Philippines may still rank low globally in data-center capital flows, investors are looking beyond its Business Process Outsourcing (BPO) crown toward the next digital frontier: AI-powered data centers that could give the country’s growth story a serious second wind.

Neumann views the Philippines’ BPO juggernaut as a launchpad for a much bigger AI infrastructure play. Investors are placing their chips on the emerging future of outsourcing, recognizing that a growing slice of the country’s economic expansion will run on data centers, automation, and artificial intelligence.

“I wouldn’t be surprised if we see big data centers coming through, because the industry is looking at the Philippines, looking at BPOs, and knows that the future lies in data centers,” he reckoned.

He specified that the Philippines is “not last in Asia” in data center investments and has plenty of room to punch above its weight. Unlocking that potential means giving its BPO workhorse the digital muscle it needs: more data centers and the right AI infrastructure to propel the industry into its next growth phase.

“There’s probably more that can happen. The availability of data centers will enable other types of businesses. When we think of BPO, we have to offer the industry the right digital infrastructure to use AI,” he said.

Neumann noted that the Philippines needs localized data centers to keep its BPO sector ahead of the AI curve, predicting a three-year investment surge that could fundamentally reshape the country’s outsourcing game.

As Accenture Country Managing Director Ambe Tierro laid out, BPO leaders are already moving decisively before the AI wave hits full force. They are prioritizing the reskilling and upskilling of their workforce to maintain an edge alongside the data center boom, ensuring Filipino talent—not just machines—remains at the core of the industry’s next chapter.

If there is a silver lining, the Strategic Investment Priority Plan (SIPP) is putting high-tech investments squarely in the Philippines’ crosshairs. It prioritizes hyperscale data centers, AI, and off-grid digital infrastructure as strategic capital hotspots to pull the country deeper into the new digital economy cycle.

So far, the BOI is swinging for a ₱4.5-trillion investment haul over the next two years, leaning heavily on the powerful tandem of digital infrastructure and renewable energy to drive the next wave of economic expansion.

Uppal likewise acknowledged that public-private partnerships (PPPs) are firmly on investors’ radar, but the pipeline needs to move faster. Water and power projects remain among the most promising opportunities stuck between investor interest and actual implementation.

He indicated that capital is ready to flow when policy is right, but the country’s PPP pipeline is clogged with projects that have sat on paper long past their timelines—risking becoming invisible to the very investors they were designed to attract.

“If a good PPP policy comes up, there is funding available for that,” he said, emphasizing that while the country has “extensive PPP programs, some have been there for so long that we forget the PPPs.”

Nevertheless, Uppal cited the Ninoy Aquino International Airport (NAIA) rehabilitation project as proof that Philippine PPPs can move beyond the drawing board. It shows that with the right deal structure, political will, and execution, even massive infrastructure projects can transition from plan to reality.

Among the work-in-progress PPP projects poised to test the Philippines’ execution capability are the North-South Commuter Railway and the Cavite-Batangas Expressway. Meanwhile, New Clark City—envisioned as a high-tech and industrial hub for the Luzon Economic Corridor—is slated to host the hotly debated Pax Silica development.

In the HSBC CEO’s view, the manufacturing sector remains a “sporadic growth story.” However, fresh commitments from industrial behemoths like Samsung could inject the sector with the firepower needed to shift from scattered gains to sustained momentum.

He argued that, if executed correctly, the manufacturing ecosystem around the Pax Silica AI hub could transform the Philippines into a much larger industrial investment draw. This spans semiconductors, AI hardware, advanced electronics, critical mineral processing, and battery materials—pushing the country’s nickel, copper, and technology assets deeper into global AI and advanced manufacturing supply chains.

Yet as capital stands ready, investors and lenders are watching whether the Philippine government can finally deliver the policy, regulatory, and ease-of-doing-business reforms demanded for years. Money is ready to enter, but it has no patience for red tape, policy uncertainty, and endless delays.

“Our clients around the world can see the investment case for the Philippines. What they are asking for is a clearer path from interest to projects they can commit to, and that path gets shorter when government and business work through the same set of priorities,” Uppal asserted.

Neumann pointed out that the Philippines is not alone in battling power shortages, water constraints, and land bottlenecks—the same infrastructure headaches afflict markets worldwide. However, capital will ultimately favor countries that clear those hurdles fastest and turn constraints into investable opportunities.

For now, power supply reliability remains the biggest chokepoint for the anticipated data center gold rush. Creating a clear energy roadmap—rather than another parade of investment promises—will be critical to convincing investors that the country can reliably power hungry AI infrastructure.

Broadly, the HSBC summit left little doubt that investors have both the capital and the appetite. They now need the government and the private sector to work in lockstep, especially through PPPs, to turn plans into funded, shovel-ready projects.

The other friction points demand equally clear remedies: investors want the government to cut red tape, ensure “green lanes” deliver faster permits, and push economic liberalization further. Foreign capital will enter and expand where barriers are low, rules are transparent, and bureaucracy moves at the speed of business.

Priya Kini, HSBC Managing Director and Head of Banking for International Markets Asia, firmly stated: “Global multinationals and international investors are asking how quickly opportunities in the Philippines can turn into projects they are able to finance.”

She added, “Our role is to connect them to those opportunities and to the people who can move them forward. We are well placed to do that through our network across Asia and internationally.”

The major takeaway is clear: the Philippines still has plenty of bait in the water. But if government leaders continue to make investors jump through hoops, that capital may simply swim away to countries where rules are predictable, bureaucratic barriers are thin, and doing business requires far fewer acrobatics.