Efforts to reform the constitution to encourage foreign investment, particularly foreign ownership of land, were abandoned amidst nationalist opposition. Initial optimism about prospects for economic reform also had dimmed amid concerns of governmental corruption. Recent scandals involving the Philippine Stock Exchange, and the President's close ties to certain businessmen, have shaken confidence of investors and other members of the business community. However, the pace of economic reform, particularly the passage of key legislation in areas such as retail trade, electronic commerce, banking reform, and securities regulation, suggests that the investment and business climate can be expected to continue to improve. Although the Philippines is rich in agricultural potential, inadequate infrastructure, lack of financing, and past government policies have limited productivity gains.
Philippine farms produce food crops for domestic consumption and cash crops for export.
The government has instituted conservation programs, but deforestation remains a severe problem. With its 7,107 islands, the Philippines has a very diverse range of fishing areas. Notwithstanding good prospects for the aquaculture subsector, the fishing industry continues to face a bleak future due to destructive fishing methods, a lack of funds, and an absence of government support. Heavier industries are dominated by the production of cement, glass, industrial chemicals, fertilizers, iron and steel, and refined petroleum products. The industrial sector is concentrated in the urban areas, especially in the metropolitan Manila region and has only weak linkages to the rural economy.