The latest foreign direct investment (FDI) figures from the Bangko Sentral ng Pilipinas (BSP) should be enough to make President Benigno Aquino 3rd and his economic managers depressed if they really have a grasp on how the country’s economy is working or not working.
Based on the BSP data, the Philippines attracted $3.9 billion in FDIs in 2013, which is 20 percent higher than the $3.2 billion of the previous year. The Aquino administration cannot crow about that accomplishment because Vietnam attracted $13.1 billion in FDI in the first 10 months of last year, while Thailand expects to post as much as $33 billion in foreign investments for 2013. Thailand’s 2013 FDI projection should be the source of envy and even shame for the Aquino administration, because that means that despite the political turmoil in Bangkok since October 2013, Thailand is still capable of attracting almost 10 times more FDIs than the Philippines last year.
On the other hand, Vietnam is turning out to be a paradise for foreign capitalists, even if the typical Vietnamese can crow about how they were able to beat the hell out of Americans during the 10,000-day Vietnam War.
But Thailand’s 2013 projection of $33 billion in foreign investments flowing into its economy every year should make President Aquino and his economists ask what is wrong in the way the country’s economy is being managed, because “jobless growth” has been ailing the Philippines even before Mr. Aquino took office in June 2010.
Imagine what impact $33 billion in FDIs will have on the Philippine economy. That will definitely lead to the creation of hundreds of thousands, or even millions, of jobs. And with the creation of jobs comes higher tax payments.
While the Philippines topped Thailand in terms of gross domestic product (GDP) growth in 2013 (7.2 percent versus 2.9 percent), Thailand still tops the Philippines in tourist arrivals (4.7 million versus 26.7 million).
And when it comes to unemployment, Thailand’s 1 percent is way better than the Philippines’ 7.5 percent.
While there are worries over how the current political crisis in Thailand will have an impact on the country’s economic growth, the truth is Thailand remains one of the best destinations for FDIs in Southeast Asia. Which means that the Philippines has a lot of catching up to do.
And once the political crisis in Thailand ends, foreign investors will definitely start setting up shop there because Thailand has better infrastructure and does not have one of the highest electricity rates in the world.