Foreign Direct Investments – Facts holding back our Growth !




Below is a blog written prior to the Presidential Election of 2016 and how the scenario has changed for the Philippines, Filipino people and Economy in  general.  Even the World’s view on the South East Asian Region has changed and trade investments are pouring in.  Manufacturing sector and tourism has picked up considerably yet a lot of work still needs to be achieved and realized.

The Golden Age of Infrastructure is coming and this will surely help most of the population in the years to come.

Why wasn’t this done by previous administrations, your guess is as good as mine but no need to dwell on the past, we just have to learn from it and do something about it.

June 1, 2015

Here’s a video clip  from, on why and how the Philippines have continued to be at the bottom amongst its neighboring countries as far as Foreign Direct Investments is concerned.  Take note this is so critical for emerging countries like the Philippines. You will notice that our dismal growth on FDI investments from 2013 to the present despite upgrades from Credit Rating companies such as Fitch and Standard and Poor.

Oh well, take note that the Business Process Outsourcing, Call Center, major developer’s Mall Expansions and the Overseas Foreign Remittance our banks receive are for the upper lower, middle and upper class people.  90% of the Filipino population is composed of what we call the “masses” and they are the ones that need  “foreign direct investments” because the  jobs created by these multi national or foreign companies are the jobs our Filipino masses qualify for such as Manufacturing, Assembly Lines, Transportation, Construction workers, etc.   When you analyze it, the wealth isn’t really spreading and poverty is rampant !

Another issue is the controversial subject why foreigners can’t own land in the Philippines.  Anyway, if only our government can get their act together, what a country the Philippines could be and  can you imagine the Filipinos regaining the “Pride”, respect and discipline we once had in the 60’s.

To view the video clip, click on :

As a follow up to the above’s article on Foreign Direct Investment, I’ve included the article from Business Mirror’s correspondent, Daphne J. Magturo on how the Philippines has emerged as among the top foreign direct investment destination in East Asia but value of inflows still paled below our Southeast Asian neighbors…..

THE PHILIPPINES has emerged anew among top foreign direct investment (FDI) destinations in East Asia, beating global and regional growth rates besides, but value of inflows still paled against those of comparable Southeast Asian peers, the United Nations Conference on Trade and Development (UNCTAD) said in its World Investment Report 2015 released yesterday.

In a statement accompanying the report, UNCTAD said the Philippines climbed to 9th spot among the top 10 FDI recipients in East Asia (composed of Northeast and Southeast Asia) with $6.201-billion inflows from 10th place in 2013 with just $3.737 billion.

Global FDI inflows fell 16% annually to $1.23 trillion in 2014, dragged by the “fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks.”

Philippine inflows, as tracked by the central bank, grew 65.9% to an all-time high last year, compared to East Asia’s 10% increment and Southeast Asia’s 5%.

The latest ranking, which used data from the Financial Times and UNCTAD’S FDI and Multinational Enterprises Database, showed China at the top of the heap with $128.5 billion last year from $123.9 billion in 2013.

UNCTAD’s report cited among contributors to Philippine FDI inflows last year Singapore sovereign wealth fund GIC Pte Ltd’s acquisition of an 11% stake in Emperador, Inc. — a producer of brandy and other alcoholic beverages — for $390 million, as well as the takeover by Angat Hydropower Corp. — a subsidiary of Korea Water Resources Corp. — of a hydroelectric plant in Bulacan for about $440 million.

As a fraction of Southeast Asian inflows, the Philippines grew to 4.7% of the region’s $132.867 billion last year from 3.00% of $126.087 billion in 2013.

In terms of value, however, Philippine inflows were still dwarfed by those of its comparable Southeast Asian peers:

• Singapore added 4% to $67.523 billion last year from $64.793 billion in 2013;

• Indonesia grew 20% to $22.580 bilion from $18.817 billion;

• Thailand lost 10% to $12.566 billion from $14.016 billion;

• Malaysia gave up 11% to $10.799 billion from $12.115 billion; while

• Vietnam gained 3% to $9.2 billion from $8.9 billion.

Latest available central bank data show the Philippines’ inbound FDI flows dropped by half to $851 million last quarter from $1.715 billion in 2014’s comparable three months.

“The common complaint of foreign investors is the state of infrastructure,” said Philippine Institute for Development Studies (PIDS) President Gilberto M. Llanto during the report’s launch yesterday in Makati City.

“They are also mostly concerned on the tax regime, policy uncertainty, and regulatory framework,” he added.

“What the government can do is continue the reforms.”

In the same briefing, PIDS Senior Research Fellow Erlinda M. Medalla cited the need to “relax foreign equity restrictions” in various industries. “Imagine if you are a foreign investor and you invest in a country where you have no control of your investments, why would you do that?”

Mr. Llanto added that while the country’s incentives “generally compare well” with others, one problem with the Philippines is that it has seven incentive-giving bodies. “In other countries, investors talk to only one. There is a harmonized investment regime so the rules are very efficient,” he noted.

The report, which is the 25th in the series, noted that countries’ investment policy measures last year continued “to be geared predominantly towards investment liberalization, promotion and facilitation,” with more than 80% aimed at improving “entry conditions and reduce restrictions.”

“A number of countries introduced or amended their investment laws or guidelines to grant new investment incentives or to facilitate investment procedures,” it added. “Several countries relaxed restrictions on foreign ownership limitations or opened up new business activities to foreign investment.” — Daphne J. Magturo

Thank you for taking the time to read this article and as early as now, just reminding you to please vote wisely on the upcoming elections in 2016, take note of the government officials who have done well for the country and the ones who have done well for “themselves”.

Personally, i believe that qualifications to run as a politician in the Philippine Government should be revised and implemented strictly for the good of our nations rather than just being “popular” to the masses.  They should be graduates at the least and better yet, graduates with Law Degrees.

Finally, please take the time to find out which politicians are holding back on foreign direct investment rulings in the country, is it because of personal gains ?  I believe this discussions / hearings on Foreign Direct Investments are public records and one can see who amongst these government politicians have been against this.

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Robert G. Sarmiento Properties
Professional Affiliation :
Philippine Association of Real Estate Boards
Member, City of Taguig Real Estate Board 2016, 2017
Real Estate Broker’s Association of the Philippines
President, Greenhills Chapter 2008, 2009
Philippine Association of Real Estate Brokers 2000-2015
San Juan Mandaluyong Chapter 1998, 1999
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