The Wallace Business Forum said an August survey of 49 MNCs operating here found 63 percent considered the Philippines "worse" than its Southeast Asian neighbors in investment terms.
Only 27 percent said the country matched its neighbors, while 10 percent said it was better, the group said.
The MNCs home offices also ranked the Philippines eighth as a "potential investment destination" behind China, Thailand, Malaysia, South Korea, India, Singapore and Vietnam.
Security and law and order problems was the number one concern for the MNCs, said Peter Wallace, head of the survey group.
"Home offices said executives cannot travel to the Philippines because it is unsafe," Wallace said.
While the international community lauded the Philippines for a 2001 popular revolt that toppled the presidency of Joseph Estrada amid allegations of massive corruption, Wallace noted that the problem still persisted.
Corruption under the presidency of his successor, Gloria Arroyo, "is not worse than Estrada, but it is still there," Wallace said.
Poor infrastructure, political instability, bureaucratic red tape and a slow legal system were also cited as major concerns.
Despite the negative survey results, the Philippine subsidiaries ranked 39 out of 124 among subsidiaries of 124 worldwide, he said.
The survey also found 44 percent of the respondents planned to expand their operations here in the next three years, while 56 percent said they were downsizing or maintaining the status quo.
"But nobody said they’re pulling out," Wallace said.– AFP