Investment haven or hell?
Published by the Visayan Daily Star
Editor-in-Chief & President
Bureau Chief, Dumaguete
MAJA P. DELY
|CARLOS ANTONIO L. LEONARDIA
The Bangko Sentral ng Pilipinas has noted that the country’s foreign direct investments fell by nearly 30 percent for the first 11 months of 2019. The decline of FDI from $9.15 billion to $6.41 billion was attributed to muted investor confidence and the uncertain global outlook.
The drop in foreign direct investments is worrying as these are the type of investments that are more coveted as they tend to stay longer in the economy and create job opportunities for locals.
The Germans have pointed out that the Philippines faces stiff competition from its Southeast Asian neighbors in attracting FDI, especially Vietnam. German Ambassador Anke Reiffenstuel noted the uncertainty over the loss of fiscal incentives under a proposed new law was well as the failure to respect the sanctity of contracts as major concerns when it comes to decisions to invest in the Philippines.
In the light of the COVID-19 epidemic that will most likely have a negative effect on the global economy, our country will have to do better if it wants to successfully compete with our neighbors for the limited supply of FDIs during these trying times. Other concerns such as inadequate infrastructure, red tape, restrictions on foreign business, and a playing field that is increasingly becoming less level need to be addressed to prove that investor confidence is a priority for this government.
The sharp decline in foreign direct investments for the first 11 months of 2019 is a symptom of trouble in the management of the country’s economy. A country that badly needs investments to generate more jobs and livelihood sources in order to boost an economy that seems to have lost momentum cannot afford to subject itself to short-term policies based on the whims and caprice of leaders who don’t bother consulting with senior and supposedly competent officials regarding important decisions that could impact millions of lives.
What is the Philippines doing to make itself a more attractive destination for foreign and local investors who will be necessary for the economy to recover its lost momentum and grow at the same rate that impressed the world just a few years ago?*