Legarda Concerned Over Decline of Foreign Direct InvestmentsSeptember 25, 2017
Senator Loren Legarda today expressed concern over the decline of the net foreign direct investments (FDI) to the Philippines as of the first half of 2017, which was on an upward trend from 2011 until 2016.
Figures from the Bangko Sentral ng Pilipinas (BSP) show that net FDIs for the period January-June 2017 show a decline of 14% or USD 3.59-billion from USD 4.18-billion during the same period in 2016. Net FDIs in 2011 were at USD 2.00-billion, which steadily increased in the succeeding years, and were highest in 2016 at USD 7.97-billion.
Legarda, Chair of the Senate Committee on Finance, raised this concern during the hearing of the proposed 2018 budget of the National Economic and Development Authority (NEDA).
“We want to know what factors came into play that led to the decline? Given the importance of FDIs in generating jobs in the country, what measures are being undertaken, if any, in order to arrest further decline in net FDIs?” Legarda inquired.
Legarda also inquired as to the extent of the impact of the decline in net FDIs on the peso’s continued depreciation against the US dollar, as well as its effect on paid employment in the country.
NEDA Director-General Ernesto Pernia said that one of the reasons could be the country’s lengthy foreign investment negative list (FINL), which needs to be liberalized. He also pointed out that policies on ease of doing business and simplifying restrictions on investments, which are part of the Legislative-Executive Development Advisory Council’s (LEDAC) list of priority legislative measures, could counter the problem, thus these measures should be fast-tracked and passed within the year.
Legarda cited certain stumbling blocks in the whole governmental process, namely, (1) unnecessary and redundant data, as well as regulatory and enforcement mandates; (2) the unpredictability of customs procedures from port to port; (3) poor or inadequate infrastructure; (4) corruption in ports of entry; and (5) lack of clarity on regulations and enforcement.
“We need to fix these issues now. Even without new legislation, the government has to address challenges while working within the existing policy framework in order to attract more investors,” Legarda concluded.