ASEAN KEY DESTINATIONS
Economist wants more FDI in Philippines
He said the country’s anti-foreigner approach and protectionism are the impediments to attracting FDI.
”If we cannot change the Constitution at least to be creative in legislation to allow foreign groups to invest more than 40 percent,” Villegas said.
He cited the energy, mining, telecoms, and infrastructure sectors as among those attractive to foreign investors.
”I’m optimistic that it [relaxing foreign restrictions] would be the focus of the Cabinet members,” said Villegas, who was a member of the commission that drafted the Philippine Constitution under the administration of former President Corazon Aquino, the late mother of the incumbent President Benigno Noynoy Aquino 3rd.
”The only way that we can sustain a 7 percent to 8 percent growth is for us to see a substantial amount of FDI and that’s the biggest challenge of President Aquino,” Villegas said.
According to a report of the United Nations Conference on Trade and Development (UNCTAD), the country’s FDI inflows last year reached US$1.95 billion, up by 26.16 percent from 2008, but lower than the US$2.92 billion in 2007.
Despite the improvement, the country remained at the bottom in the list of Southeast Asian nations in terms of attracting FDI. Inflows in Thailand reached US$5.95 billion; Vietnam, US$4.5 billion; Indonesia, US$4.88 billion; and Singapore, US$16.81 billion.
The Philippines outranked only Malaysia that had inflows of US$1.38 billion.
Villegas said the Philippines is in a situation that the savings rate to gross domestic product (GDP) is higher than the investment rate.
He said that the country’s savings rate stood at nearly 30 percent, while investment rate is below 17 percent.
In 1994, the Philippines’ investment to GDP ratio stood at 24.1 percent.
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