Foreign Investment In The Philippines Increasing

Recent indicators clearly demonstrate that the Philippines is rising above its fellow South East Asian nations in the arena of foreign investment. Increasingly, people from overseas are choosing to plunge their capital into Philippines or Philippines-based businesses – with a net positive effect for the nation as a whole. A report by Credit Suisse reveals that China appears to be becoming less attractive an investment opportunity, and the Philippines has been able to sweep up those investors who wish to have a foothold in the Asian market, but are reticent about their prospects with China. This could mean great things for the economy of the Philippines, which may hopefully give small businesses here the chance they need to truly thrive.

Dollar Handshake

FDI Indicators Up

According to financial services company Credit Suisse, FDI (Foreign Direct Investments) in the Philippines are at a around $8 billion – the highest it’s been in decades. This is an astonishing rise of $3 billion since last year, and $7 billion over the last five years. That’s an astronomical level of change, and a very welcome one! The Philippines now surpasses Thailand in foreign investment – something many thought would never be possible. Foreign investment is important to a nation, as it strengthens the local currency, and increases the net amount of wealth within the nation. More money coming into the country than leaving it is, needless to say, a good thing – assuming that this wealth is spread reasonably and benefits more than just a privileged few.

Japan And The USA

It seems that the major enthusiasm for Philippines investment comes from Japan and the USA, whose magnates are plunging considerable financial resources into the fertile Philippines markets. The majority of FDI money goes into the finance and manufacturing industries, but the overall boost to the economy is likely to have a driving benefit for every Philippines-based industry. Problems with capital flow and the infrastructure issues to which this leads may be rectified if more foreign money comes into our economy – allowing business in the Philippines as a whole to bolster its strength and trade from a position of security. Issues with communications infrastructures can be sorted, for example, giving more businesses access to online trading. And businesses will be more able to put precautions in place against problems – a lack of insurance or security has seen many businesses tumble unduly. However, in order for this to occur, the Philippines needs to continue to attract foreign investors, and convince them that the Philippines is the right place in which to place their money.

Angling For America

The government of the Philippines has not been reticent about its plans to hook American investors. Bold plans for improvements to various infrastructures are designed not only to improve the Philippines internally, but to catch the eye of American investors who may otherwise be hesitant about the Philippines’ ability to utilize and multiply their business. Currently, the major attraction of the Philippines for foreign investors is the presence of a large and eager workforce. However, were this to be bolstered with improved transport and communication links, the Philippines would be likely to become an even more appetizing prospect. The Philippines government has been offering juicy infrastructure deals to American contractors, and clearly hopes to promote the Philippines as a viable work opportunity in American eyes. Whether or not this works in the manner the government hopes largely remains to be seen – but if the improving FDI statistics are any indicator, it seems that things are going well thus far.

Good For The Philippines?

As we’ve mentioned, in general, increased foreign investment in a nation tends to lead to improvements overall. Greater tax revenue from bolstered businesses leads to government-funded improvements to things like roads, hospitals, schools, and so on. Or that’s the theory. It is to be hoped that the economic boom which many are predicting for the Philippines does indeed ‘trickle down’ to small businesses and ordinary people, rather than being concentrated in the hands of a wealthy few. However, increased foreign investment does often mean a great increase in business opportunity – so it is perhaps not too much to hope that smaller businesses may snatch a piece of the investment pie!


Author Bio: This article is contributed by Gemma Crane who work primarily as a freelance writer. I also worked for many years in business and finance.