PH ‘scored well’ in meeting FDI conditions – World Bank

MANILA, Philippines – There are certain conditions that should be in place before a country could reap the positive impacts of job-generating foreign direct investments (FDIs), according to a World Bank research.

The good news? These conditions have been met by the Philippines. (READ: What is holding back Philippine FDI?)

The caveat is that despite the presence of FDI anchors, the country still lags behind its neighbors in actually catching these investments.

World Bank Lead Economist Rogier Van Den Brink stressed both in his presentation during the 39th Philippine Business Conference and Expo on Wednesday, October 23.

He cautioned that having these conditions in place is just the start and that there is much to be done to attract FDIs and sustain them.

Philippines ‘scored well’

Van Den Brink shared that “FDI impacts are conditioned on a number of things… and the Philippines scored well [in meeting them].”

Van Den Brink outlined these as follows:

• a conduit for world-class technology and know-how
• an engine of growth and provider of formal jobs
• a source of private capital
• a way to access export markets

The realization of each depends on the presence of certain conditions. These are: 

• the absorptive capacity of human capital
• openness to trade 
• sufficiently developed financial markets

For the absorptive capacity of the Philippines, Van Den Brink noted that the country is able to identify the strengths of its labor force and utilize it well.

Proof of this is the Filipinos’ strength in the Business Process Outsourcing (BPO) sector, which is attracting more and more investments each year. (READ: BPO expansion in provinces promotes inclusive growth)

Another example is the skills of overseas Filipino workers (OFWs) — one that apparent to host countries, which have kept demand for OFW services constant.

Trade, financial markets

Van Den Brink also said that the country is open to trade and its financial markets are sufficiently developed.

This is consistent with more and more countries showing interest in the Philippines in scouting for alternative investment sites. (READ: ‘Powerhouse’ business delegation to visit PH)

The economist also noted how the local stock market made waves for its unexpected performance in the first 6 monts of 2013, when it was dubbed as one of the best performing stock markets in the world in 2012. (READ: ‘PH stock market 3rd best in world’)

The Philippines “has a real shot at living up to the potential it has always had,” especially in eyeing FDIs, he pointed out. – Rappler.com