By ANTHONY IAN CRUZ
Malaya
Oct. 20, 2007
INVESTMENTS worldwide are at a nearly record high but the Philippines still lags behind Southeast Asian neighbors in attracting foreign direct investment (FDI) inflows and continues to fail to attain its maximum investment potential.
These are some of the findings of the World Investment Report 2007 of the UN Conference on Trade and Development which was released yesterday.
Worldwide FDIs grew to $1.3 trillion in 2006 from $945 million in 2005, said UNCTAD.
The highest ever in history was $1.4 trillion figure in 2000.
The report said Southeast Asia – composed of the 10-member Association of Southeast Asian Nations (Asean) and Timor Leste – gathered a total of $51.483 billion FDIs in 2006, up by 25 percent from $41.071 billion in 2005.
According to the Philippines Country Factsheet released by UNCTAD, FDI inflows reached $2.345 billion in 2006. While up by 26 percent from $1.854 billion in 2005, the figure represented 4.5 percent of total FDI inflows to the region.
More investments went to Singapore with $24 billion, Thailand with $10 billion and Malaysia with $6 billion. Vietnam is within striking distance of the Philippines with $2.3 billion.
Nileema Doble, UN resident coordinator in the Philippines, said the World Investment Report 2007 stresses the need to address legitimate issues about transnational corporations, including how they share their growing revenues and how to limit the repatriation of profits from their host countries to their home countries.
Jovi Dacanay, professor of the University of Asia and the Pacific, said in her presentation of the UNCTAD report that the growth in FDIs in 2006 occurred in all three groups of economies: developed countries, developing countries; and transition economies of the former socialist bloc.
Most of the FDIs in 2006 went to developed countries.
FDIs to elite developed countries led by the US, United Kingdom and France rose by 45 percent to reach $857 billion or 65 percent of the world’s total FDIs.
About 29 percent of the world’s FDIs (about $379 billion) went to majority developing countries.
The transition economies obtained the smallest FDI share and percentage.
UNCTAD said the growth in FDI inflows may be attributed to mergers and acquisitions by transnational corporations of stable companies engaged in extractive industries in the developing countries, and from the rising demand and prices of products from extractive industries such as mining, petroleum and gas and oil exploration.
Trade secretary Elmer Hernandez said the growth of FDIs in the Philippines is due to the fiscal and financial policies, market monitoring, and the good investment climate provided by government. ###