Phl told to maximize potential, address infra gap

MANILA, Philippines - The Philippines should maximize its potentials as well as address the infrastructure gap to attract more foreign investments, according to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2012.

A total of $1.524 trillion in foreign direct investments (FDI) were recorded globally last year, 16 percent up from 2010. Inflows to Southeast Asia amounted to $116.559 billion, of which only 1.2 percent went to the Philippines or an equivalent of $1.262 billion, UNCTAD data showed.

The 2011 figure was even lower than the $1.298 billion recorded in 2010.

Investments attracted by the country were miniscule compared to region’s top placer in FDI inflows, Singapore, which attracted $64 billion in investments. A far second was Indonesia with $18.906 billion in FDI inflows last year, followed by Malaysia ($11.966 billion), Thailand ($9.572 billion) and Vietnam ($7.430 billion).

Inflows to the Philippines, however, dwarfed those that entered Brunei Darussalam ($1.208 billion), Cambodia ($892 million), Myanmar ($850 million), Laos ($450 million) and Timor Leste ($20 million), the report also showed.

Greenfield projects— or the actual new projects that entered the country in 2011— were even smaller in value. UNCTAD data showed that the country attracted only $257 million in new FDI in 2011. This was the third smallest in the region, data showed, outperforming only those that entered Brunei ($2 million) and Myanmar ($84 million).

Data on greenfield projects that entered Timor Leste, Cambodia, and Laos were unavailable.

Economist Solita Collas-Monsod said the Philippines “certainly has the potential but remains unattractive” to foreign investors.

“We need to maximize our potentials. We have a skilled labor force, good market size and a lot of natural resources. What we need to do is craft a policy framework that will allow us to maximize these potentials,” said Monsod during the UNCTAD report’s Manila launch.

The report highlighted the need for countries to develop investment policy framework that will promote inclusive growth and sustainable development.

The world needs a new generation of policies that places inclusive growth and sustainable development at the heart of efforts to attract and benefit from foreign direct investment,” UNCTAD said in a statement.

Monsod said “there is no one-size-fits-all” mechanism in crafting an investment framework, but said all of them should be “crafted in such a way that there is equal promotion” for growth and development.

“We are not attracting the right investments. Investments should contribute to job generation and growth,” she explained.