In 2013, the Philippines liberalized its rural banking industry through a law that allowed non-Filipino citizens to own, acquire, or purchase up to 60 percent of a rural bank’s voting stocks. This study provides an initial assessment of the impact of foreign equity infusion on rural banks by examining whether rural banks with foreign equity perform significantly better than purely Filipino-owned banks in terms of profitability and asset quality. Empirical analysis reveals that the presence of foreign investors and their capital infusions improved the profitability and asset quality of the recipient rural banks. However, these improvements were observed only in selected rural banks and typically manifested with a lag following the infusion of capital. These gains were attributed to strategic changes that involved substantial short-term costs but were projected to yield significant long-term benefits. The findings suggest that rural banks could benefit from seeking foreign investment to enhance their performance.