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Philippines
Overview
Last reviewed - 01 August 2026The Philippines is strategically located off the southeastern coast of mainland Asia, with a flying time of four hours or less to most major Asian countries. Its strategic location allowed it to bridge Eastern and Western cultures, producing a rich history of Asian, European, and American influences. The Philippines has been counted as the third-largest English-speaking country in the world. The capital of the Philippines is Manila, and the currency is the Philippine peso (PHP).
The Philippines adheres to the principles of a democratic republican state with a presidential form of government. The 2026 Strategic Investment Priority Plan (SIPP) continues to classify the priority investment areas into three tiers aligned with national development goals. Tier I covers sectors with high potential for job creation, those addressing market gaps in essential goods and services, supporting critical industries, and generating value through innovation or upgrading across sectors such as agriculture, manufacturing, healthcare, logistics, and sustainable industries. Tier II focuses on activities that are critical to industrial development but are not sufficiently supplied domestically, including import-substituting industries, defense-related services, renewable energy, food security, and strategic value-chain gaps. Tier III prioritizes innovation and technology-driven activities, including research and development, commercialization of intellectual property, and advanced industries such as artificial intelligence, cybersecurity, semiconductors, biotechnology, and other industry technologies. The government continues to grant fiscal and non-fiscal incentives to qualified investors that do business in the Philippines in these priority areas. 100% foreign ownership remains permissible in many areas of investment, although certain industries are subject to foreign ownership limitation.
The Philippine gross domestic product (GDP) posted a growth rate of 2.8 percent in the first quarter of 2026, following a full-year GDP growth of 4.4 percent in 2025. The main contributors to the growth were: Wholesale and retail trade; repair of motor vehicles and motorcycles, 4.6 percent; Financial and insurance activities, 3.4 percent; and Public administration and defense; compulsory social security, at 8.6 percent. All major economic sectors, namely: Agriculture, forestry, and fishing (AFF), Industry, and Services posted year-on-year growths of 0.2 percent, 0.1 percent, and 4.5 percent, respectively.
PwC in the Philippines
Isla Lipana & Co. is the Philippine member firm of the PwC global network. We have provided professional services in the Philippines for 104 years. Along with the other Philippine member firms of the PwC network (Cabrera and Company, PricewaterhouseCoopers Consulting Services Philippines Co. Ltd., and PricewaterhouseCoopers Business Services Philippines Co. Ltd.) and affiliate member firm PricewaterhouseCoopers Services (in Brunei Darussalam), we continue to deliver quality services to our clients through our main office in Makati City and our offices in the cities of Manila, Cebu, Iloilo, Davao, Bandar Seri Begawan and Pasig. As of 1 July 2026, we have 55 partners and principals and nearly 3,000 professional and support staff.
Quick rates and dates
| Corporate income tax (CIT) rates | |
|---|---|
| Headline CIT rate (%) |
25 |
| Corporate income tax (CIT) due dates | |
|---|---|
| CIT return due date |
Quarterly return: Within 60 days from the close of each of the first three quarters. Annual return: On or before the 15th day of the fourth month following the close of the taxable year. |
| CIT final payment due date |
On the 15th day of the fourth month following the close of the taxable year. |
| CIT estimated payment due dates |
Quarterly instalments paid within 60 days after each quarter. |
| Personal income tax (PIT) rates | |
|---|---|
| Headline PIT rate (%) |
35 |
| Personal income tax (PIT) due dates | |
|---|---|
| PIT return due date |
15 April |
| PIT final payment due date |
15 April |
| PIT estimated payment due dates |
For employees, the Philippines follows the PAYE system, which is carried out by the local employer through the WHT mechanism. Under this system, it is the responsibility of the employer (local company) to withhold and remit taxes on the compensation of its employees on a monthly basis. Further, our tax regulations require an annualisation of income and WHTs to be performed at year end (December). |
| Value-added tax (VAT) rates | |
|---|---|
| Standard VAT rate (%) |
12 |
| Withholding tax (WHT) rates | |
|---|---|
| WHT rates (%) (Dividends/Interest/Royalties) |
Resident: 0 / 10, 15, or 20 / 20; Non-resident: 15 or 25 / 20 / 25 |
| Capital gains tax (CGT) rates | |
|---|---|
| Headline corporate capital gains tax rate (%) |
See the Philippines corporate tax summary for capital gain rates. |
| Headline individual capital gains tax rate (%) |
See the Philippines individual tax summary for capital gain rates. |
| Net wealth/worth tax rates | |
|---|---|
| Headline net wealth/worth tax rate (%) |
NA |
| Inheritance and gift tax rates | |
|---|---|
| Headline inheritance tax rate (%) |
There is no inheritance tax in the Philippines. However, an estate tax of 6% is imposed on the assets of the decedent taxpayer. |
| Headline gift tax rate (%) |
6 |
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