MANILA, Philippines – The Philippine government failed to meet the foreign direct investment (FDI) target set by the Joint Foreign Chambers (JFC) in their Arangkada Philippines roadmap last year.
Worse, the foreign chambers believes the government will also miss the target this year.
The Arangkada Philippines lists recommendations by the JFC in order to help the country move twice as fast in order to attain economic growth.
When the JFC launched the Arangkada Philippines in 2010, they said the Philippines will be able to get $75 billion worth of FDIs by 2020, if only the government follows the recommendations in the Arangkada Philippines study.
Based on this, European Chamber of Commerce of the Philippines (ECCP) president Hubert d’Aboville said the Philippines must get $7.5 billion worth of FDIs annually.
However, he said based on the latest Bangko Sentral ng Pilipinas (BSP) data, the full year FDI of the Philippines will be below $1 billion. Available data showed that FDI is only at $850 million.
“We decelerated instead of moving twice as fast, which is what is in the Arangkada,” d’Aboville said.
Based on their first assessment presented to the public yesterday at the Marriot Hotel, it showed that only 55 percent of the recommendations enumerated in the Arangkada Philippines was acted on while 45 percent received no action or the actions made things worse.
D’Aboville said that Trade and Industry Secretary Gregory L. Domingo assured him that the manner by which the FDI is calculated is flawed. Therefore, the FDI is grossly under reported. D’Aboville said that based on the calculations of Domingo, the actual FDI for this year should be anywhere between $5 billion to $6 billion. The new numbers is expected to be out mid this year, D’Aboville said. In spite of this, the country will still miss the target.
For this year, D’Aboville said the FDI must improve to $2.5 billion. This is still below the original target of $7.5 billion. “This year we have to grow by more than $1 billion. If it is still below $1 billion then it is very bad.”
“Definitely we have to accelerate. There must be a drastic improvement in the FDIs. Most investors are moving towards Asia from Europe and the United States,” D’Aboville said.
An example of a recommendation of the JFC that has had no progress and has even regressed is the creation of new jobs through increased investments.
The JFC said that for over a decade, the Philippines has been experiencing jobless growth, with the labor force increasing each year more than the new jobs created.
The labor force in 2010 reached 38.9 million of which 5.7 million worked in the formal sector and 27.2 million in the informal sector, with the remainder unemployed, underemployed, or non working. To reduce chronic unemployment and underemployment, levels of sustained inclusive growth of seven percent and above are required. Such high levels are only possible with higher domestic savings and investment, including FDI.
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By: Ma. Elisa P. Osorio
Source: The Philippine Star, Jan. 27, 2012
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