The Philippines continues to lag behind its Southeast Asian peers in terms of foreign direct investments inflows, and the government has to lure in more foreign investors if it wants to achieve growth that will benefit all Filipinos.
According to the latest United Nations Conference on Trade and Development Global Investment Trends Monitor, FDI inflows to the Philippines rose 10.6 percent in the first semester of 2012 from last year’s $0.9 billion.
But the report showed that the amount of FDIs that entered the Philippines in the first semester of the year was much lower than that of its neighbors in the region.
“The Philippines needs to attract much higher levels of FDIs in order to achieve its goal of sustained, inclusive high growth rates,” said economist Benjamin Diokno of the University of the Philippines.
FDI inflows to Singapore in the first semester of 2012 reached $27.4 billion, lower by 1.9 percent from the previous year’s level.
FDI inflows to Indonesia came in at $8.2 billion in the first semester of 2012, down by 20.6 percent from last year. Malaysia posted an FDI inflow of $4.4 billion in the first six months of the year, decreasing by 36.6 percent from its year-ago level.
Meanwhile, FDI inflows to Thailand grew 62.1 percent in the first half of 2012 to $5.6 billion. Cambodia registered an FDI inflow of $0.9 billion in the first semester of the year, increasing by 165.7 percent from 2011.
The amount of FDI inflows to the Philippines indicates that the reforms adopted by the government are still not enough, Diokno said.
“Foreign investors remain unimpressed with the reforms put in place by the Aquino administration,” he explained.
Also, the difficulty of doing business in the Philippines could be one reason why the country has a measly share of FDI inflows compared with that of other nations in the region, Diokno said, citing the results of the “Doing Business 2013” report, published by the World Bank and its investment arm, International Finance Corp.
The Philippines slipped to 138th from 136th in the global ranking on ease of doing business.