SENATE Minority Leader Franklin Drilon has expressed deep concern over the government’s inability to attract new foreign investments.
During the Senate hearing on the proposed budget of the National Economic Development Authority (NEDA) on Friday, Drilon learned that new investment in the first half of 2017 plunged by 90.3 percent from the same period in 2016.
He said latest foreign direct investment (FDI) data showed a “significant” drop in the influx of new investments.
He cited data from the Bangko Sentral ng Pilipinas, which showed that foreign equity placements other than reinvestments of earnings decreased by 90.3 percent during the first six months of 2017 ($141 million) vis-à-vis the same period in 2016 ($1.448 billion).
“We note from the reports that there is a deceleration in new investment. This is very alarming. Why such a huge drop? Is this an indication of anything?” Drilon asked.
In response to Drilon’s questions regarding the huge drop in new investment, Sen. Loren Legarda, Senate Committee on Finance chairwoman, relayed NEDA’s explanation that it was caused by some restrictions.
However, even Legarda admitted that she did not agree on the answer: “I am told that it is because of certain restrictions. I do not agree with that answer because these restrictions were already there when there was an increase.”
Drilon replied, “I admire your candor.” Legarda said: “I am candid because I am very concerned. I cannot sugarcoat something because the figure would not lie.”
“I cannot create answers if I am not supplied the justification for the decline in the foreign direct investment,” she said.
Drilon said NEDA had a lot to explain about the huge drop in new foreign investments, saying it was “reflective of confidence of foreign business on our country.”
“If we are to attract new foreign investment, then it is about time that we take a serious look at how things are going on in our country, because new investment would not come in unless we are able to raise the investors’ confidence level on our country,” he said.
Citing the 2018 Asean Business Outlook Survey published by the American Chamber of Commerce in Singapore and the United States Chamber of Commerce, Drilon said that among the companies surveyed, only 22 percent chose the Philippines as a possible expansion location, with Vietnam topping the list (34%).
The Philippines ranked sixth, lagging behind Vietnam, Myanmar (29%), Indonesia (29%) Thailand (26%), and Cambodia (23%).
FDIs are critical to the country’s economic growth and contributes in providing job and business opportunities to Filipinos, Drilon said.