Expert Consulting for the Philippines—Backed by Over a Century of Local Insight

Why Work With Philippine Strategies

The Wagner name, for centuries associated with distinguished military service in Europe and the United States, has held noteworthy significance in the annals of Philippine history since the first family member, Capt. John A., arrived in January of 1899.

For nearly half a century, from 1899 to 1946, the majority of Americans in the Philippines were military males serving in the Army, Navy and Marines. After separation or retirement, many settled here with Filipina wives and their children, starting local businesses or working for the US government in a variety of service/support roles. By 1941, nearly 9,000 Americans called the Philippines home.

Rather than surrendering and being sent to prison camps, hundreds went underground and fought the Imperial Japanese with their Filipino brothers and sisters, whom they had known and grew up with since early childhood. These Americans, speaking fluent, inflectional Tagalog, Kapampangan and Cebuano, were considered “Kababayan” (Compatriots), just as much as their friends and neighbors with Malay or Aeta genetics. During the post-war decades, natural attrition and migration back to mainland America saw their numbers dwindle to under half the pre-war number, replenished only by military retirees from Subic Naval and Clark Air Force bases.

Some families, like the Wagner’s, Forbes’, Smiths and Laurents, maintained a presence on the islands into the modern era. For the most part engaged in charitable or philanthropic efforts to aid the peoples of the Philippines, they also provided and continue to effect services for American industry, US government and visiting military elements using their extensive familial contacts with local power centers garnered and developed over more than a century of relationships.

The business, diplomatic and political environments of this region are unique beyond measure in respects that shock even the loftiest of ambassadors, consuls or State Department officials who, living in the embassy bubble, will insist they came to understand the country and its peoples after only a typical 3-year posting, ignoring wisdom and advice from the “Puting Maalam” (Old-timers / Wisemen) at their peril and frequent disgrace.

As Afghanistan was dubbed the “Graveyard of Empires” by Milton Bearden of Foreign Affairs magazine, the Philippines very easily fits into the “Caveat Emptor” classification of foreign investment and military alliances.

In multiple cases, the golden roads to success promised by Manila are littered with failed attempts of US, Canadian, Australian and European companies to prosper in special economic zones that ended up being scandal-ridden preserves of illegal Chinese online gambling and Korean money-laundering.

The US military, emboldened by the Benigno “Noynoy” Aquino III administration that enacted the Enhanced Defense Cooperation Agreement (EDCA) in 2014, was stymied just two years later when the xenophobic, pro-China Rodrigo Duterte ascended to the presidency.

Both situations cost hundreds of millions of dollars in wasted expenditures and 8 years of time losses. Only those organizations who listened to the Puting Maalam were able to enjoy success during this period.

When considering the Philippines, foreign investors, diplomatic planners and military strategists would be wise to heed the most famous quote attributed to Lieutenant-General Robert Stephenson Smyth Baden-Powell, 1st Baron Baden-Powell, 5th Dragoon Guards of the British Army:

“Before charging in with the cavalry, one must always have a good scouting team.”
– Lieutenant-General Robert Baden-Powell

The Present Military Environment in the Philippines

From 2016 to 2022, the administration of Rodrigo Duterte shifted away from the Philippines’ traditional ally, the United States, and toward China. The reasons behind this move were simple:

(1) He felt slighted and disrespected by Obama,
(2) China offered eyepopping amounts of money if he could keep US forces away from their artificial island building aka. stealth oil and gas fracking projects in the South China Sea,
(3) Denied a US Visa due to his human rights abuse record while Mayor of Davao City, he felt it was time to promulgate animosity toward Americans, Europeans and Australians – the “loathed whites” – in the minds of Filipinos to “free them of their colonial mentality”.

Ignoring warnings of duplicitousness on the part of the Chinese by other countries who had become their loan sharking victims, his plan worked well at first, hauling in boatloads of Yuan while gleefully denigrating foreigners in public, until July 2020 when he was unceremoniously left at the proverbial altar by Beijing.

His successor, Ferdinand “Bongbong” Marcos Jr., known colloquially as “BBM”, immediately pivoted back to Washington after entering office in July of 2022, reinvigorating traditional ties through the establishment of a total of 9 US military sites under the EDCA (Enhanced Defense Cooperation Agreement) that was enacted by President Benigno “Noynoy” Aquino III, Duterte’s immediate precursor.

Correcting the damage done to the original coalition that had been polluted with bribery and corruption among senior officers and officials by the Chinese continues to be a daunting task, particularly in view of increasing aggression by the PLAN (Peoples’ Liberation Army Navy) against Philippine Navy + Coast Guard vessels and aircraft in the West Philippine Sea that had been enabled by the Duterte.

Beyond these challenges is the finding and deporting of an estimated 4000 PLA personnel that had entered the country between 2017 to 2022, embedded in “POGO’s” (Philippine Online Gaming Organizations) that Duterte had encouraged as revenue generators.

To address the issue, BBM ordered a blanket ban on POGO’s in 2024 that included a dragnet to round up Chinese who were in the country on sham spousal or retirement visas issued by corrupt former Duterte-era Bureau of Immigration (“BI”) managers.

As of April 2025, no known POGO’s were in operation on Luzon or in the Visayas; most of them had either closed down or migrated south to Davao to enjoy protection under the Duterte family.

Cleaning these out poses additional challenges as age-old tribal animosities (Mindanaoans hold Tagalogs in disdain, etc.) intensify after the sudden, surprising arrest and extradition to the ICC (International Criminal Court) in The Hague of Duterte himself, allowing whatever PLA remnants yet exist within such organizations to operate freely, even in the open.

American and allied government / military entities currently or considering working in the Philippines are advised to avail of information gathered through more than a century of in-country experience and local contact development.

Foreign Investment in the Philippines

When President Rodrigo Duterte assumed office in 2016, the Philippines entered an era marked by tough rhetoric, a controversial war on drugs, and a pivot towards China. But one of the less discussed — yet deeply consequential — impacts of his administration was the collapse of foreign direct investment (FDI), which the country still struggles to recover from nearly a decade later.

The Duterte Decline

Despite campaign promises of economic growth and infrastructure overhaul, Duterte’s tenure saw FDI inflows drop dramatically. According to Bangko Sentral ng Pilipinas (BSP) data, net FDI inflows peaked in 2017 at $10.3 billion, only to begin a downward slide that was exacerbated by unpredictable policies, political volatility, and a growing perception that the Philippines was an increasingly risky place to do business.

Duterte’s open hostility to Western allies, cozying up to China without significant economic reciprocation, and the chilling effect of his aggressive domestic policies all contributed to investor hesitation. The business climate suffered from regulatory uncertainty, rule-of-law concerns, and a perception that the government was more interested in consolidating power than enabling business.

The Marcos-Duterte Conflict

Upon entering the Palace in mid-2022, President Ferdinand “Bongbong” Marcos Jr. ushered in an era of cautious optimism that the country might reorient towards stability. But that hope was short-lived. What has emerged instead is an increasingly public power struggle between the Marcos and Duterte dynasties — two of the country’s most powerful political families, now locked in a bitter rivalry.

This ongoing “clan war” has spilled over into public policy, appointments, and the security sector. For foreign investors, it signals a return to uncertainty. With key sectors of the bureaucracy and judiciary potentially influenced by partisan interests, long-term investment becomes harder to justify.

Notably, the rivalry hampers any serious push for reform of the industrial sector. Despite Marcos Jr.'s stated goals of economic liberalization, the political capital needed to pursue meaningful changes is being squandered on factional battles. Many foreign investors already setup in country have complained bitterly about abuses heaped upon them by LCU’s (Local Government Units), contrary to national government promises.

The 60/40 Rule: A Relic That Still Repels

One major, long-standing deterrent remains untouched: the 60/40 rule in the current Philippine Constitution, which limits foreign ownership of land and key industries to just 40%. While certain sectors like retail and renewable energy have seen incremental liberalization, the core restriction on equity remains.

Foreign firms continue to view this as a dealbreaker, particularly when neighboring countries like Vietnam and Indonesia offer more favorable terms. Without constitutional reform — a political hot potato that Marcos has effectively championed yet — the Philippines will remain a secondary choice for serious foreign capital.

The CREATE Law: A Broken Promise

Adding salt to the wound, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, passed during the Duterte administration and implemented under Marcos Jr., has caused widespread disillusionment among foreign investors — especially those operating in freeport zones like Clark and Subic.

While touted as a way to rationalize tax incentives and attract more business, the CREATE law did the opposite for many Locators. It retroactively changed the terms of their tax holidays and incentives, undermining trust and violating long-standing agreements. Many companies that had sunk millions into facilities based on specific tax regimes suddenly found themselves in a new, less favorable playing field.

This reversal has led to legal disputes and, in some cases, outright withdrawal of investments. For foreign investors, the message was clear: even government assurances in the Philippines can be subject to abrupt political change.

The Bottom Line

The Philippines once held the promise of becoming Southeast Asia’s rising economic tiger, but the past decade has turned that narrative into a cautionary tale. FDI remains sluggish, and despite official optimism, the numbers don’t lie. Political infighting, outdated ownership laws, and broken promises have left the country at a standstill.

Until real reform — political, economic, and institutional — is undertaken, foreign investors will continue to look elsewhere. And unless the Marcos and Duterte camps find a way to end their zero-sum war, the Philippines risks becoming a footnote in the regional economic story rather than a protagonist.

How the Current Political Landscape Could Impact American Diplomatic Endeavors in the Philippines

The impeachment and potential conviction of Philippine Vice President Sara Duterte have potentially significant implications for international relations, particularly concerning the safety and operations of American diplomats and government officials in the central and southern regions of the Philippines.

Historically, the southern Philippines, especially areas like Mindanao, have faced security challenges, including incidents involving foreign nationals. In October 2024, an American YouTuber named Elliot Onil Eastman was kidnapped in Sibuco, Zamboanga del Norte. He was reportedly shot while resisting abduction and later died from his injuries, the body allegedly disposed of at sea. This and other such events not reported by the local press to obfuscate negative publicity underscore the persistent security concerns in the region.

The political turbulence stemming from Vice President Duterte's impeachment could exacerbate these security issues. Analysts suggest that while domestic events like impeachment proceedings are internal matters, they can have ripple effects on foreign relations and damage perceptions of stability. Josue Raphael Cortez, a lecturer at the School of Diplomacy and Governance at De La Salle-College of St. Benilde in Manila, noted that such proceedings might impact foreign relations by influencing international assessments of the Philippines' already abysmal commitment to the rule of law.

Furthermore, the geopolitical landscape in the region is complex. China has expressed concerns over U.S. military deployments in the Philippines, stating that such actions undermine regional peace and stability. Chinese Foreign Minister Wang Yi highlighted these apprehensions in discussions with South Korean officials, emphasizing the need to avoid escalating tensions. Yi also slammed the planned sale of American F-16’s as the Philippines attempting to cause trouble in the region.

Given these dynamics, American diplomats and government officials operating in the Philippines may face increased difficulties as political instability can embolden insurgent groups or criminal elements, some of which are in fact sanctioned by or proxies for LGU’s (“Local Government Units”), potentially leading to increased threats against foreign nationals. Uncertainty in local governance may also disrupt diplomatic initiatives, aid programs, and collaborative projects in the region. Additionally, navigating relationships with local and national authorities could become more complex amid shifting political alliances and public sentiments, especially in view of press propaganda that tends to blame the US for much of what is ailing the country.

While the impeachment of Vice President Sara Duterte is a matter for Filipinos to work through, its ramifications could extend to the operational environment for American diplomats and officials throughout the country. Proactive measures, including enhanced security protocols and continuous assessment of the local political climate, will be essential to mitigate potential challenges in this evolving landscape.