The Philippines - top investment destination

  

Philippines top investment

The Philippines ranks number 1 among best countries to invest in, according to the US News and World Report, beating more developed countries such as Singapore, Australia, the United Kingdom and France. This global research highlighted that The Philippines' young population will attract more firms looking for a good labour force.

The 2018 Best Countries report data is based on how global perceptions - of 80 nations - define countries in terms of a number of qualitative characteristics, impressions that have the potential to drive trade, travel and investment and affect national economies.
On its website, US News explained that the report had been ranked “based on scores primarily from more than 6,000 business decision makers on a compilation of eight equally weighted country attributes: corruption, dynamism, economic stability, entrepreneurship, favorable tax environment, innovation, skilled labour force, and technological expertise.”
The head of the Duterte administration's economic team said that strong macroeconomic fundamentals alongside plans to ramp up infrastructure spending is what prompted the Philippines to make it to the top of the list of best countries to invest in.
“In contrast to declining inflows of foreign direct investment, or FDI, to Southeast Asia as a whole, the Philippines continued to perform well, according to United Nations data. In years to come, the country is expected to receive more FDI from within the region from powerhouses like China that are looking to utilize available labour in developing nations,” the US-based firm said in a report published online.
According to the Unctad report, “in South and Southeast Asia, several countries, including Bangladesh, Nepal and the Philippines, are expected to receive more FDI in years to come, especially from within the region, in line with a division of labour between more developed countries (increasingly focusing on goods with higher value added) and less developed countries (increasingly focusing on labor-intensive activities).”
Citing a report of the Board of Investments, Unctad stated, “Thus may continue to strengthen these countries' positions in regional production networks. For instance, five Chinese companies plan to invest $10 billion in the aviation, downstream oil, renewable energy, iron and steel, and shipbuilding industries in the Philippines.”
According to Unctad, FDI “flows to the Philippines - the third largest recipient in the subregion - increased by more than 60 percent to a new high of $8 billion in 2016.”
In 2017, the Bangko Sentral ng Pilipinas data proved that net FDI inflows worth $8.7 billion exceeded the $8-billion target for 2017.
Dominguez stated that there are certain factors that propelled the Philippines to the top of the list of best countries to invest in and those are: young and hardworking workforce, an excellent inclusive growth momentum, an expanding middle class, politically stable environment, strong and popular leadership, fiscal discipline, stable monetary policy, membership in Asean, and achievable infrastructure program, a strong anti-corruption drive, and improved revenue collection.”
The Philippines was followed by Indonesia on the list, while Poland ranks number three, followed by Malaysia and Singapore.
The US firm's 2018 best countries to invest in ranking was created in partnership with global marketing communications firm Y&R's brand strategy arm BAV Group as well as the University of Pennsylvania's Wharton School.
Although the Philippines was categorised as the best country to invest in, economist Alvin P. Ang - director of Ateneo Centre for Economic Research and Development - said that the government needs to make an effort and encourage foreign investors to pour capital into the country.
Under the right circumstances and in a more encouraging environment, foreign companies could further contribute in the current administration's effort, particularly on infrastructure. Ang said that the Philippines need extra money on infrastructure since local companies have maxed out.
“We still have a lot of problems, the focus is for local companies but for foreign companies that are limited options,” said Alvin P. Ang. “We are moving along that line, but that cannot be achieved in a year's time.”
The government, however, trusts that the necessary critical reforms are already in place. Socioeconomic Secretary Ernest M. Pernia said, “Our efforts to create a more business and investor-friendly environment are gaining traction in the past year and a half and the world is already seeing it.”
President Rodrigo Duterte's administration, for instance, announced a multi-billion-dollar “Build, Build, Build” initiative in an effort to usher in a “golden age of infrastructure” within five years.

 

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