Philippines ranked best country for FDI

UNTIL

recently, the country merely ranked fourth among its neighbor countries in the ASEAN Foreign Direct Investment ( FDI) Report. Singapore was first, Malaysia and Thailand 2nd, Vietnam 3rd. Indonesia had the largest intra-regional FDI.

But we missed this important news report which showed a positive change in world perception of our country’s potential as an FDI hub.

The 2018 US News and World Report which was shared on a Facebook thread by IBM IT expert Alejandro Melchor III, ranked the Philippines first out of five countries – Indonesia, Poland, Malaysia, and Singapore, in that order who ranked the best in the world for FDI investment.

While this perception may not have yet been translated into reality, it is enough for us to feel good and optimistic about the future.

For sometime now, we have looked forward to an improved investment climate which we felt was one way out of the poverty and income inequality trap. FDI is regarded as a major factor in alleviating the balance- ofpayment problem. It is seen a stable source of external capital, more than portfolio or bank lending. The article, “Why Innovation, why Analytics? Why Digital Transformation? noted that the FDI chart inflows into the ASEAN from 1995 to 2017 showed a clear uptrend which would continue through 2030 and beyond, according to the Asian Development Bank. And FDI investors appear to be looking for the presence of major attributes in favored countries such as talent and skills development. Our success in the Business Process Outsourcing (BPO) industry, intercultural skills, resilience, and flexibility make our human resources attractive to foreign investors.

The Philippines has likewise continually ended up being co-equal with such countries as India, China, and Brazil in metrics that matter to Globally Integrated Enterprises like IBM.

It is easy to gloat over positive perceptions from potential investors. My first reaction was that this could discourage the outmigration of some of our best and brightest who do not see any future in the country. It would also motivate our human resource development planners todesign creative and innovative learning systems that would revolutionize our educational system.

As we now realize, we are faced with several hurdles to sustainability. While we look forward to achieving inclusive growth, the current state of inequality – social and income gaps, lack of adequate human resources and high quality jobs, continuing conflict (EKJs, drug wars and threats in the West Philippine Sea), not to mention non-made factors such as frequency of disasters and corruption, provide daunting challenges.

Thus, readiness means that the structural reforms going on – investment in physical infrastructure and human capital be accompanied by good governance – transparency and accountability. Media and citizen vigilance is critical in promoting a fair, competitive environment and the active participation of non-government sectors.

We must also recognize that the effects of FDIs can be both positive and negative. While the positive consequences are more manifest (stimulate economic growth, create jobs, upgrade human resources, and provide new opportunities for workers), there are also disadvantages. FDIs can lead to exploitation, affect the stability of current exchange rate, foment political instability as well as stop domestic investments from happening. These are known experiences shared by FDI participants in recent journals on investment and trade and industry.