The Strategic Case for Exposure to Philippine Infrastructure ETFs as MVP's Tollways IPO Looms

The Philippine economy is poised for sustained growth through 2025 and 2026, with GDP projections remaining stable at 5.8% for 2026 despite a modest downward revision from earlier forecasts, according to an Asian Development Bank report. This macroeconomic resilience, coupled with the country's expanding infrastructure landscape, creates a compelling case for investors to consider long-term exposure to Philippine infrastructure exchange-traded funds (ETFs). While direct performance metrics for these ETFs remain sparse, the interplay between MVP Tollways' strategic projects and broader economic tailwinds suggests a favorable environment for capital allocation and diversification.

Macroeconomic Tailwinds and Infrastructure Demand

The Philippines' infrastructure sector has long been a cornerstone of economic development, with the government prioritizing projects to address underinvestment in transportation, energy, and urban connectivity. According to the Asian Development Bank, the country's GDP growth trajectory through 2026 hinges on continued infrastructure expansion, which accounts for roughly 15% of annual public spending. This focus is critical for improving productivity and reducing regional disparities, making infrastructure-linked assets a natural hedge against macroeconomic volatility.

While specific Philippine infrastructure ETFs lack granular performance data, the sector's indirect indicators are promising. For instance, Conduent Inc., a global business process management firm with operations in the Philippines, reported a 25% improvement in adjusted EBITDA in Q3 2025 despite a 5% revenue decline, according to a Globe and Mail report. Though not an ETF, Conduent's resilience underscores the growing demand for infrastructure-related services, which could translate into stronger fundamentals for ETFs with exposure to similar sectors.

MVP Tollways: A Catalyst for Sector Momentum

Metro Pacific Tollways Corp. (MPTC), a subsidiary of Manuel V. Pangilinan's Metro Pacific Investments Corp. (MVP), is a linchpin in the Philippines' infrastructure ecosystem. Despite delays in its much-anticipated IPO-pushed to 2027 as the company prioritizes project completion and debt management, as the Philstar report notes-MPTC's activities remain a bellwether for sector dynamics. The company is currently raising P20 billion through bond sales to fund critical projects, including the Cavite-Laguna Expressway (CALAX) and the Cebu-Cordova Link Expressway (CCLEX), as the InsiderPH report details. These projects are expected to enhance regional connectivity, a factor that could drive long-term value for infrastructure ETFs.

MPTC's "dual-track" strategy-securing debt financing before pursuing equity offerings-reflects a disciplined approach to capital deployment, as the InsiderPH report notes. This model aligns with the risk-mitigation principles of long-term investors, as it ensures that infrastructure projects are completed efficiently, thereby reducing the likelihood of cost overruns that could dampen ETF returns.

Diversification and Long-Term Capital Allocation

Infrastructure ETFs offer a unique diversification benefit in a global portfolio, particularly for investors seeking exposure to emerging markets. Unlike traditional equities, infrastructure assets often generate stable cash flows through long-term contracts, such as toll collections or power purchase agreements. This characteristic makes them less volatile than cyclical sectors, a trait that becomes increasingly valuable in a low-growth environment.

Moreover, the delayed IPO of MPTC creates an opportunity for ETFs to consolidate their role as accessible vehicles for retail and institutional investors. While equity investors await the tollways unit's public listing, ETFs can provide immediate exposure to a diversified basket of infrastructure assets, including toll roads, power plants, and logistics hubs, as the MPTC website states. This is particularly relevant in the Philippines, where private-sector participation in infrastructure development is growing.

Strategic Considerations for Investors

For long-term capital allocation, Philippine infrastructure ETFs present three key advantages:
1. Policy Support: The government's "Build, Build, Build" program, though scaled back in recent years, remains a driver of infrastructure spending, as the MPTC website notes.
2. Demographic Tailwinds: A young, urbanizing population will increase demand for transportation and energy infrastructure over the next decade.
3. Yield Potential: Infrastructure assets typically offer higher yields than government bonds, making them attractive in a low-interest-rate environment.

However, investors must remain mindful of risks, including regulatory changes, currency volatility, and project execution delays. Diversifying across multiple infrastructure subsectors-such as toll roads, renewable energy, and airports-can mitigate these risks while capturing growth across the value chain.

Conclusion

While the absence of granular ETF performance data introduces some uncertainty, the macroeconomic and sector-specific fundamentals for Philippine infrastructure remain robust. As MVP Tollways advances its projects and the broader economy continues its growth trajectory, infrastructure ETFs offer a strategic vehicle for investors seeking to balance risk and return in a long-term portfolio. By aligning with the country's development priorities, these funds can serve as both a hedge against volatility and a conduit for capitalizing on the Philippines' infrastructure renaissance.