Several United States firms doing business in the Philippines have reported being asked for bribes by customs officials, according to a 2025 State Department report, which mentions corruption at the Bureau of Customs as one of the major barriers to investment in the country.
The US Embassy in Manila has received multiple reports from American businesses of customs officials soliciting unofficial fees, alongside complaints of overly invasive searches and inconsistent customs charges, the State Department said in its annual Investment Climate Statements report on the Philippines.
The report – released September 26 – evaluates the business environment and investment climate in countries around the world to guide American investors. The report ultimately finds that while the Philippines has taken steps to improve its investment climate, corruption remains a pervasive problem that deters foreign investors.
The State Department draws attention to the Bureau of Customs as one of the government agencies most frequently accused of corruption, noting that the solicitation of facilitation fees – informal payments demanded by officials to expedite transactions – remains a common complaint among US firms.
“Some U.S. investors describe business registration, customs, and immigration processes as burdensome,” the report said. “Customs processes, in particular, can present challenges and the Embassy has received multiple reports from U.S. businesses of overly invasive searches, inconsistent customs charges, and solicitations of ‘facilitation fees’ (e.g., bribes) from some customs officials.”
The Bureau of Customs was described by the US State Department as “still considered to be one of the most corrupt agencies in the country.’
The report says that foreign direct investment inflows to the Philippines remained flat at $8.9 billion in 2024, the same level as 2023, despite government efforts to attract more investors, including a tax law passed in November 2024 that offers corporate tax breaks for up to 27 years.
The Philippines ranked 114th out of 180 countries on Transparency International’s 2024 Corruption Perceptions Index, staying around that level since 2019. The World Economic Forum and other organizations have cited corruption as among the top problematic factors for doing business in the Philippines.
“Corruption is a pervasive and long-standing problem in both the public and private sector,” the State Department report said.
Beyond corruption, the report identified other barriers to investment: poor infrastructure, high power and logistics costs, regulatory inconsistencies, a cumbersome bureaucracy, and a complex, slow judicial system.
Traffic in major cities and congestion in the ports remain obstacles, while large family-owned conglomerates dominate the economic landscape, sometimes crowding out smaller or international businesses.