Philippines has lowest FDI ratio in ASEAN

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The Asia Foundation PhilippinesThe Philippines has the lowest rate of Foreign Direct Investments (FDI) among the countries in Association of Southeast Asian Nations (ASEAN), according to 2014 United Nations Human Development Report released on August 21.

Only 1.12 per cent of the Philippines’ GDP came from FDI, compared to 2.26 per cent in Indonesia, 2.35 per cent in Thailand, 3.66 per cent in Laos, 4.17 per cent in Malaysia, 6 per cent in Vietnam, 7.03 per cent in Cambodia, 7.39 per cent in Brunei and 20.62 per cent in Singapore. Myanmar has no data.

Socio-economic Planning Secretary and Director-General of the National Economic and Development Authority (NEDA) Arsenio Balisacan said in an interview with reporters that it is not surprising for the Philippines to have low FDI compared to ASEAN countries.

“If you look at our neighbours in ASEAN through the last 30 years, these countries have consistently been growing at a rate of 6 to 8 per cent annually,” he said. “But for us, when did we start growing consistently at the same rate? Only in the last three years.”

Balisacan said that businessmen will think twice about investing in a developing country that has an unstable growth. They would prefer the countries which have achieved sustained growth.

“If a country is known for corruption, power shortages and lousy infrastructure, this will reduce the productivity of capital and therefore the profitability and earnings of businesses,” Balisacan said.

“[Other ASEAN countries] have been growing long enough and they are already magnets of FDIs. The challenges for us is to make sure that our growth is sustainable, and eventually we will be attracting more and more FDIs,” he said.

Balisacan cited the six per cent average economic growth of the Philippines in the past three years as reason for what will soon be an increase in the FDIs going into the Philippines.

“Rome was not built in a day. There are no miracles, we are talking about the real world here,” he said.

Aside from FDIs, the Philippines also ranked as the second lowest in international trade with 64.79 per cent of GDP. The lowest ranked is Indonesia with 50.07 per cent, then Philippines, followed by Laos with 82.27 per cent.

The remaining countries in the ASEAN have international trade percentages above 100, such as Brunei with 112.54 per cent, Cambodia with 113.58 per cent, Thailand with 148.83 per cent, Malaysia with 163 per cent, Vietnam with 179.98 per cent and Singapore with 379.14 per cent.

Philippines continued to rank highest in ASEAN in foreign remittance inflows with 10.25 percent of GDP.

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Reading Time: 2 minutes

The Philippines has the lowest rate of Foreign Direct Investments (FDI) among the countries in Association of Southeast Asian Nations (ASEAN), according to 2014 United Nations Human Development Report released on August 21.

Reading Time: 2 minutes

The Asia Foundation PhilippinesThe Philippines has the lowest rate of Foreign Direct Investments (FDI) among the countries in Association of Southeast Asian Nations (ASEAN), according to 2014 United Nations Human Development Report released on August 21.

Only 1.12 per cent of the Philippines’ GDP came from FDI, compared to 2.26 per cent in Indonesia, 2.35 per cent in Thailand, 3.66 per cent in Laos, 4.17 per cent in Malaysia, 6 per cent in Vietnam, 7.03 per cent in Cambodia, 7.39 per cent in Brunei and 20.62 per cent in Singapore. Myanmar has no data.

Socio-economic Planning Secretary and Director-General of the National Economic and Development Authority (NEDA) Arsenio Balisacan said in an interview with reporters that it is not surprising for the Philippines to have low FDI compared to ASEAN countries.

“If you look at our neighbours in ASEAN through the last 30 years, these countries have consistently been growing at a rate of 6 to 8 per cent annually,” he said. “But for us, when did we start growing consistently at the same rate? Only in the last three years.”

Balisacan said that businessmen will think twice about investing in a developing country that has an unstable growth. They would prefer the countries which have achieved sustained growth.

“If a country is known for corruption, power shortages and lousy infrastructure, this will reduce the productivity of capital and therefore the profitability and earnings of businesses,” Balisacan said.

“[Other ASEAN countries] have been growing long enough and they are already magnets of FDIs. The challenges for us is to make sure that our growth is sustainable, and eventually we will be attracting more and more FDIs,” he said.

Balisacan cited the six per cent average economic growth of the Philippines in the past three years as reason for what will soon be an increase in the FDIs going into the Philippines.

“Rome was not built in a day. There are no miracles, we are talking about the real world here,” he said.

Aside from FDIs, the Philippines also ranked as the second lowest in international trade with 64.79 per cent of GDP. The lowest ranked is Indonesia with 50.07 per cent, then Philippines, followed by Laos with 82.27 per cent.

The remaining countries in the ASEAN have international trade percentages above 100, such as Brunei with 112.54 per cent, Cambodia with 113.58 per cent, Thailand with 148.83 per cent, Malaysia with 163 per cent, Vietnam with 179.98 per cent and Singapore with 379.14 per cent.

Philippines continued to rank highest in ASEAN in foreign remittance inflows with 10.25 percent of GDP.

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