After increasing by 15.5% in 2012 compared to 2011, foreign direct investment (FDI) again rose by 20% in 2013, reaching 3.86b USD. Considering the comparative advantages of the Philippines, such as: English speaking and well-skilled manpower, a strong cultural proximity to the United States, its geographical location in a dynamic area, the FDI flow in the Philippines remains rather weak. This can be partially explained by the fact that the country is evolving into a service society, with a low capital strength, which means a need of minimal equipment. In addition, the government favors subcontracting agreements between foreign companies and local enterprises rather than FDI in the strict sense of the term. Lastly, corruption, instability, inadequate infrastructures and not enough juridical security discourages investment.
|Philippines||East Asia & Pacific||United States||Germany|
|Index of Transaction Transparency*||2.0||5.0||7.0||5.0|
|Index of Manager’s Responsibility**||3.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||4.3||5.4||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||2,007||3,215||3,860|
|FDI Stock (million USD)||25,480||28,687||32,547|
|Performance Index*, Ranking on 181 Economies||137||-||-|
|Potential Index**, Ranking on 177 Economies||51||-||-|
|Number of Greenfield Investments***||74||90||100|
|FDI Inwards (in % of GFCF****)||4.8||6.6||7.3|
|FDI Stock (in % of GDP)||11.4||11.5||12.0|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
Any Comments About This Content? Report It to Us.
© Export Entreprises SA, All Rights Reserved.
Last Updates: October 2014