COMPARED TO ITS NEIGHBORS, the Philippines attracted fewer foreign direct investments (FDIs) last year, a United Nations agency said.Businessmen had mixed comments on the UN Conference on Trade and Development (UNCTAD) report, with one saying declining competitiveness was to blame and another optimistic on prospects for 2008.
In the UNCTAD report released Tuesday, the Philippines was shown lagging behind four Southeast Asian economies in terms of FDI inflows.
It said preliminary estimates showed the country netted $2.5 billion last year, up 8.6% from $2.3 billion in 2006. This, however, paled in comparison with Singapore’s $37 billion, a 52.6% jump from 2006’s $24.2 billion, and Malaysia’s $9.4 billion, which was 54.4% higher from $6.1 billion the previous year. Thailand and Indonesia, meanwhile, raked in $10 billion (up 2%) and $6 billion (up 7.1%) from 2006’s $9.8 billion and $5.6 billion, respectively.
FDIs directed at the Philippines accounted for just 1.11% of total inflows of $224 billion to Southeast Asia, China, Hong Kong and India.
A Makati Business Club (MBC) official on Wednesday said a number of issues had made “the Philippines less attractive.”
Alberto A. Lim, MBC executive director, said investors complain about lack of infrastructure, high power and labor costs, as well as inconsistency of policies.
“There are many factors why we are lagging behind those countries. What we need are long-term improvements … investments in infrastructure and education.”
“If we could only be more consistent, we can get more FDIs,” he said, adding the country was not likely to get additional commitments this year.
“For 2008, we would probably get the same level as nothing much has changed. Various international competitiveness surveys indicated that we have fallen behind while some countries have improved.”
Philippine Chamber of Commerce and Industry President Samie Lim, meanwhile, was more optimistic.
“Investments are made after a thorough study and with the economic growth that we experienced in 2007, I believe we can get our fair share of FDIs in 2008 particularly in the mining, business process outsourcing, and tourism sectors,” he said.
“I believe 2007 was our takeoff year and for 2008 to 2009, more FDIs are expected to come our way. In the area of infrastructure, we are on track to finishing all deliverables such as roads, ports and highways.”
In its World Investment Prospects 2007-2009 released last year, UNCTAD had the Philippines ranked 28th out of 41 countries surveyed, while neighboring Vietnam, Thailand, Malaysia, and Indonesia were 6th, 12th, 14th and 15th, respectively.
B.S. STO. DOMINGO