FDI: By changing nothing, nothing changes

Earlier this week, the Bangko Sentral ng Pilipinas reported that foreign direct investment (FDI) inflows into the country rose for a second consecutive month in November. Such positive news means a lot after a discouraging stretch marked by excessive political noise and divide as well as adverse weather disruptions. Needless to say, the global trade uncertainties still linger on that even developed nations shiver. Well, thanks to Pres. Trump’s tariff.

The BSP’s report showed that “net foreign direct investments stood at US$897 million in November 2025, marking the highest monthly level in four months or since the US$1.27 billion in July.” Though not that significant, the November performance was also an “improvement from the US$642 million recorded in October.” It brought inflows nearer again to the US$1-billion mark. It is a bit lower though compared to US$900 million in the same month a year ago.

Thanks to South Korea, it happened to be the leading contributor to FDI inflows in November. Most of which went to the manufacturing sector, a very important one in our economy. Though this is a positive development, cumulatively, “net FDI inflows for January to November 2025 fell by 22.1 percent to US$7.1 billion from US$9.08 billion a year prior.”

Indeed, it is already sad that our FDIs shrank. What makes it worst is, we continued to lag behind our neighbors. If there is a little consolation, we are better than Cambodia, Laos and Myanmar, the usual bottom dwellers in the ASEAN in terms of FDI generation.

Critics may swiftly conclude that this is probably because of corruption that remained unabated and the supposed political instability that followed. It could be partly true but absolutely temporary.

Historical data will help us sort this out. As reported by the World Bank through the East Asia Pacific Economic Update in 2016, the ASEAN region, has been the largest recipient of FDIs in the Asia Pacific region. However, since 1952 until 2012, “Singapore accounts for more than half of the total FDIs to the whole region at 52%. Thailand ranks 2nd with 13%, followed closely by Indonesia at 3rd with 11%, at 4th is Malaysia with 10%, Vietnam (the once war-torn country) ranks 5th with 8%, and the Philippines is 6th with a miserable 3%.”

Likewise, a report from the United Nations Conference on Trade and Development confirmed this. From 1980 to 2013, the country accumulated the lowest amount of FDI ($362 billion) when compared to Singapore ($6.4 trillion), Thailand ($1.5 trillion), Malaysia ($1.3 trillion), Indonesia ($1.1 trillion), and Vietnam ($591 billion).

Worse for us, communist country Viet Nam (remember, communism hates capitalism) made more policy changes by raising foreign ownership from 49% to as high as 60% on some previously controlled industries. Good enough for foreigners to take control of their investments or businesses. Notably, this is part of their continuing efforts to attune their policies to the constantly changing global investment climate to attract more FDIs.

Therefore, what is really more important is for our leaders to listen to some business groups’ venerable plea to ease constitutional restrictions on foreign ownership in certain industries. Remember, our constitution limits foreign ownership to 40% in some undertakings and in land ownership. Most of these undertakings usually involve natural resources and public utilities. These restrictions are clearly manifested in the Foreign Investments Negative List. This is a list of all business activities where foreigners are either restricted or banned.

There was an attempt then to revisit our constitution. To recall, President Duterte signed Executive Order No.10 creating a 25-member body that would study proposals to amend the 1987 Constitution. In signing such executive order, he emphatically stressed that, “There is a need to review the 1987 Philippine Constitution to ensure that it is truly reflective of the needs, ideals and aspirations of the Filipino people and to ensure that the mandate of the people as expressed thereon, is responsive to changing times.”

As we all know, nothing has changed so far. What we witnessed was just a glimpse of it.   A debate then as to how to effect the proposed changes. Is it through con-con or con-ass?

Apparently, therefore, what is important right now is for all the players (Senators and Congressmen) to make true their commitments in amending some economic provisions of our constitution. After all, there is nothing wrong with change, if it is for the better. Otherwise, in terms of FDIs, we shall continue to get crumbs. Then, eventually, be with the bottom dwellers in the ASEAN forever.