n New Zealand and then Australia, President Aquino urged businessmen to consider the Philippines as an investment destination. As in his other foreign trips, the President’s sales pitch focused on his campaign against corruption, which includes leveling the playing field for business and cutting red tape.
He will need to do more; foreign investors still need convincing. As shown in regular surveys, business confidence in the Aquino administration remains high. Much of that confidence is fueled by ongoing anti-corruption efforts. The stock market also continues to reach new highs. Compared with its Southeast Asian neighbors, however, the Philippines is attracting the lowest level of foreign direct investment.
The United Nations Conference on Trade and Development or UNCTAD reported recently that FDI in the Philippines in the first half of 2012 rose by 12.5 percent from the same period last year, totaling $900 million. This went against the trend in Southeast Asia, where FDI dropped by five percent to $52 billion. It also bucked the global trend, which saw FDI falling by eight percent to $668 billion.
The Philippines, however, trailed its neighbors in FDI, according to UNCTAD. Tiny Singapore drew the highest level of FDI with $27.4 billion from January to June, followed by Indonesia with $8.2 billion, Thailand with $5.6 billion and Malaysia with $4.4 billion. Like the Philippines, Thailand and Cambodia also bucked the regional downtrend in FDI.
President Aquino has said he wants more job-generating investments around the country. He should find out why other Southeast Asian nations are attracting more than quadruple the FDI lured by the Philippines. He should already have some idea, based on the latest Doing Business report, which showed the Philippines as a regional laggard in ease of doing business.
Apart from barriers to doing business in this country, there are other factors that investors have brought to the attention of the government for many years. The UNCTAD report is just the latest reminder to the President that he will have to do more if he wants businessmen to back their vote of confidence in his administration with solid investments.