Investing in the Philippines

Investing in the Philippines

Located in the Southeast Asian region , the Philippines is a member of the Association of South East Asian Nations (ASEAN . The countries with largest economies in that region are Malaysia , Singapore , Thailand and Indonesia . These countries benefited from generous foreign investment in the 1990 's , but they were eclipsed by China and India after the financial crisis of 1997 . But Southeast Asia has rebounded in recent years , helped in part by a boom in prices of commodities like rubber palm oil , rice , oil and gas . Foreign direct investment

into the ASEAN countries rose to a record 38 billion last year , surpassing levels seen at the peak of the region 's boom in the 1990 's . China , which has double the population of Southeast Asia , attracted about 53 billion in foreign investment last year (Fuller , 23 Aug 2006

The combined growth for the top ASEAN countries in 2005 is estimated at 5 .3 , a 0 .7-point drop from the 2004 figure . Vietnam , on the back of the country 's booming industrial and service sectors , is estimated to post the highest individual growth figure among the five , at 8 .3 . Indonesia led by buoyant external demand , is projected to grow at 5 .5 , while Malaysia 's growth rate is estimated to slow to 5 .0 in 2005 , due to weakened private sector demand . The Philippines is predicted to grow at 4 .8 , supported by overseas remittances , while Thailand is estimated to grow at 4 .6 , owing to the Thai government 's aggressive fiscal policy (JCN Newswire , 15 Dec 2005

Since 2002 , ASEAN GDP growth has recovered and accelerated from the global economic slowdown in 2001 . This recovery was driven by continued strong performance in the services sector , improved exports and agricultural output , as well as a high level of remittances from Filipinos working abroad . In 2005 , however , GDP growth slowed to 5 .1 percent from 6 .0 percent in 2004 , due to weak exports and a decline in investment . Meanwhile , the services sector remained a key growth driver and private consumption remained strong supported by surging remittances

With lower GDP growth and higher population growth , the Philippines ' per capita GDP growth has lagged behind fast-growing East Asian economies such as South Korea , Malaysia and Thailand in the past years . This is largely due to the Philippines ' relative unattractiveness as an investment destination because of its political and economic instability , unsustainable fiscal position , poor infrastructure financial market constraints , corruption and poor governance . In this regard , I will have to think twice in investing in the Philippines if they will not improve the investment climate that is critical to boosting the country 's growth potential

References

Fuller , T (2006 , Aug . 23 . Southeast Asia Group Seeks To Accelerate a Trade Zone . New York Times ,

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JCN Newswire (2005 , Dec . 15 .Institute of Developing Economies (JETRO Releases its East Asian Economic Outlook for 2006 . Japan Corporate News Network . Tokyo ,

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