RP, Thailand investor pariahs, survey shows

THE Philippines, along with strife-torn Thailand, are unattractive destinations for global executives planning to invest in Southeast Asia this year, according to an international consulting firm.

In its 2010 Foreign Direct Investment (FDI) Confidence Index, A.T. Kearney said the two countries were excluded from the top 25 economies considered attractive destinations this year.

Thailand was ranked 20th in 2004 and 2005, while the Philippines has been excluded from the list since 2004.

Vietnam placed 12th, followed by Indonesia, 19th; Malaysia, 20th; and Singapore, 24th.

The most attractive investment destinations are China, the US, India, Brazil, Germany and Poland.

The FDI index provides a unique look at the present and future prospects for international investment flows. Companies participating in the survey account for more than $2 trillion in annual global revenues.

“The results indicate a return to market fundamentals and a flight to quality for corporate executives,” Paul Laudicina, managing officer and chairman of A.T. Kearney said.

“Companies are looking for the antidote to uncertainty and increasingly looking to invest in the near abroad,” he added.

The report said FDI flows will remain disappointing through 2011.

It also said that executives are wary of making investments in the current economic climate, as they expect the economic turnaround to happen no earlier than 2011.

“Half of the companies surveyed also report that they are postponing investments as a result of market uncertainty and difficulties in obtaining credit,” the report said.

“Of the nearly half of investors that indicated plans to postpone their FDI investment, most will do so for a year or more, probably presaging flat FDI levels for the foreseeable future,” it added.

A.T. Kearney said the main drivers behind these low numbers are uncertainty about market opportunities amid the current turmoil and difficulty finding financing.

A stunning 72 percent of investors, however, believe that the Asia-Pacific region will lead the world out of the recession.

Only 15 percent believe that North America will rebound the fastest and a mere 6 percent believe that Europe will lead the way to recovery.

A.T. Kearney said Asian investors exhibit more optimism and FDI investment intention than their counterparts from the US or Europe.

Seven of the top 10 preferred investment targets for Asian investors were “near abroad” countries from the Asia Pacific region, the report said.

The index is a regular survey of global executives conducted by A.T. Kearney.

A.T. Kearney is one of the world’s largest management consulting firms, providing strategic, operational, organizational and technology consulting to the world’s leading companies. –DARWIN G AMOJELAR Senior Reporter, Manila Times