Expert Spotlight: Selectivity and execution shape Philippine M&A

Philippine M&A activity is moving at different speeds. Some investors are seeing stronger pipelines, while others report slower activity in larger transactions. Across the discussion, investors emphasized greater selectivity alongside the opportunities entering their pipelines. They are looking beyond growth to assess whether businesses are ready to transact, scale, and create long-term value.

That tension framed Dealmakers Dialogues Philippines 2026, co-hosted by Datasite and Isla Lipana & Co./PwC Philippines for the second year. Following welcome remarks from PwC Philippines Chairman Rick Danao and Datasite APAC CRO Desmond Chua, Rayna Tong of Datasite moderated a panel featuring Trissy Rogacion, Deals & Corporate Finance Partner at PwC Philippines; Rowena Reyes, Director at Sweef Capital; Juan Carlos ‘Ayo’ Camara, Director of Origination at Navegar; and Chester Esteban, Director at Creador Private Equity.

Together, the panel examined why deal flow differs by investment strategy and transaction size, what makes a company ready for investment, and where AI can accelerate execution without replacing human judgment. Datasite Sales Engineer Andrew Chua also presented a brief technology demonstration.

Deal flow grows at different speeds

Views on Philippine deal flow varied according to investment strategy and transaction size. One Philippines-focused private equity investor had reviewed around 30% more opportunities by August 2026 than during all of 2025. Healthcare, consumer businesses, and hospitality and tourism accounted for much of that pipeline.

An investor targeting larger transactions reported a different experience. Activity had slowed during 2026, although infrastructure, energy, and healthcare continued to generate opportunities. Macro events had caused some companies to wait before returning to market.

The contrast underlined the importance of context. Ticket size, return expectations, and investment strategy can produce different views of the same market. Even so, several sectors appeared repeatedly throughout the discussion.

Healthcare opportunities included hospitals, pharmaceuticals, and medical devices. Consumer activity covered food and beverage, retail, and personal care. One investor also reported opportunities in tourism and hospitality within its pipeline. Other investment strategies were assessing education, food systems, climate resilience, renewable energy, and businesses supporting women as employees, leaders, customers, and entrepreneurs.

The range of sectors may be broad, but an attractive market position is only one part of an investment decision. Once an opportunity enters the pipeline, attention shifts from the market around the company to the company itself.

Growth needs transaction readiness

Some Philippine businesses were not established with a future investment or sale in mind. Their growth prospects may be compelling, but their legal structures and governance practices may not be ready to support a transaction. If left unresolved, these issues can delay due diligence, raise red flags, or reduce the value an investor is willing to recognize.

Investors therefore consider more than a company’s financial performance. They assess whether it has a defensible competitive position, capable management, sufficient leadership depth, and the ability to scale. For founder-led businesses, readiness also means being prepared to work with an investor over the medium to long term.

That relationship requires alignment. Founders, management teams, and investors need a shared view of the company’s direction and the decisions required to reach it. Investors also look beyond a single founder or executive to determine whether the wider leadership team can support the next stage of growth.

From an impact-focused perspective, the assessment extends to sustainability and inclusion. Impact due diligence can examine gender equality, workforce practices, climate exposure, environmental and social outcomes, and alignment with the UN Sustainable Development Goals. Findings can then be incorporated into closing documentation and monitored throughout the investment period.

These factors formed part of the panel’s assessment of whether a company could withstand due diligence and complete a transaction. Even when buyers and sellers recognize the strength of a business, however, they may still differ on its value or the terms needed to complete the deal.

Structure and alignment keep deals moving

Valuation remains a source of friction. A company may present a credible forecast and growth plan, but external volatility can make future performance harder to underwrite. The discussion covered the growing use of earnouts and structured payment arrangements to bridge valuation uncertainty, although not every seller is prepared to accept them. Founder-investor fit remains a separate consideration when assessing a potential partnership.

Private equity investors may work with a management team for five to seven years. During that period, both sides must make difficult decisions together. Trust, compatible values, and alignment around the company’s direction therefore matter alongside price.

Management depth is another consideration. Investors want confidence that capable leaders are in place beyond a single founder or executive. They also need a credible path to exit. A growing company may still present a challenge if an investor cannot identify a route to return capital to its limited partners.

The discussion pointed to several areas companies can address before seeking investment: governance, legal structure, management depth, and expectations around valuation and exit. Technology formed another part of the discussion, particularly in sourcing, document review, and due diligence.

AI speeds the work, but people build conviction

AI is already supporting several stages of the deal journey. Investors described using it to screen opportunities, support underwriting, analyze customer feedback, compare documents, and improve outreach. One lending portfolio company was also using an AI agent for loan origination and collections.

The technology demonstration illustrated one practical use of AI in due diligence: using information in the data room to prepare draft answers to buyer questions and surface the relevant source references. This can reduce repetitive work and help teams review more information efficiently.

The panel was equally clear about the limits of automation. AI can organize information, identify differences, and support analysis. However, it cannot take responsibility for an investment recommendation or assess every aspect of a potential partnership.

Experience remains essential when evaluating management quality, testing a strategy, and determining whether founders and investors share the same values. Dealmakers also rely on trusted advisors to apply lessons from previous transactions and stand behind their work.

Technology and human expertise therefore play different but complementary roles. AI can accelerate parts of the process. Relationships, accountability, judgment, and strategic thinking continue to shape the decision itself.

Looking ahead

The panel identified long-term opportunities across several parts of the Philippine economy. Healthcare and financial services remain underpenetrated compared with neighboring markets, while consumer businesses continue to form part of the opportunity set. The impact-focused perspective also considered companies that combine financial performance with measurable social or environmental outcomes.

Energy and infrastructure investment could have wider implications. The Philippines’ high electricity costs were identified as a constraint on manufacturing. Infrastructure investment that reduces these costs could improve competitiveness, support job creation, and open opportunities across related industries.

The panel repeatedly connected deal execution with due diligence readiness, realistic valuation expectations, and alignment between investors and management teams. Technology may accelerate parts of the process, but the discussion placed relationships, accountability, and judgment at the center of investment decisions.

In the current selective environment, both company readiness and execution will influence which opportunities progress into completed transactions.