PHL neighbors get more foreign investments – UN report

(Updated 6:09 pm.) While President Benigno Aquino III declared that foreign capitalists are “lining up” to invest in the Philippines, the United Nations’ World Investment Report (WIR) 2011 shows that the lines are much longer leading to Vietnam, Malaysia, Indonesia and Thailand.

Plus, investors waiting in line outside the Philippines carry heavier loads of capital.

Last year, foreign direct investment (FDI) in the Philippines, consisting of equity capital, reinvested earnings and intra-company loans, totaled $1.713 billion — roughly a fifth of the FDI Vietnam got, according to the WIR of the United Nations Conference on Trade and Development (UNCTAD).s

Malaysia did slightly better than Vietnam, attracting $9.103 billion in FDI. These two countries trumped Thailand, which received $5.813 billion. Indonesia beat them all by drawing in $13.3 billion.

Emerging markets

In terms of foreign investments in shares of stocks, the Philippines is again a lightweight contender among Southeast Asia’s emerging markets.

Last year, foreign funds placed in Philippine stocks totaled $24.893 billion, or 38 percent compared to Vietnam’s $65.628 billion.

Malaysian stocks got much more — $101.339 billion — while Indonesia’s even exceeded that at $121.527 billion, a level which Thailand surpassed by attracting $127.257 billion.

With outward investments of $4.8 trillion in stocks, the United States is the world’s top investor, compared with Japan’s investments of $831 billion.

Export powerhouses

In terms of exports, the Philippines is a welterweight in Southeast Asia. According to 2010 UNCTAD data, the Philippines exported $51.6 billion, while Vietnam shipped $70.7 billion to foreign markets. Indonesia exported $157.78 billion.

Malaysia, with $198.79 billion, edged out Thailand’s $195.31 billion.

At $351.87 billion, city-state Singapore is the export champion of Southeast Asia.

Lack of competitiveness

The Aquino administration’s economic planners and agencies admit that the Philippines ranks low in various “measures of competitiveness.”

In the Philippine Development Plan 2011-2016, the administration said the rankings of the country “reveal weakness in major development aspects compared to the rest of the world.”

“In the World Economic Forum (WEF) Global Competitiveness Index Ranking, the Philippines ranked 87th out of 133 countries, and last among the ASEAN-6 subset of countries for the period 2009-2010. In specific categories, the Philippines ranked 113th in institutions; 113th in labor market efficiency; 99th in innovation and 98th in infrastructure,” the PDP noted.

The PDP also said that in the IMD Global Competitiveness report, “the Philippines ranked 43rd out of 57 countries and last among five ASEAN members; next to last in infrastructure; and 51st in economic performance.” In the Transparency International Corruption Perception Index, the country “placed 139th out of 180 countries and 6th among the ASEAN-6.

The PDP added that last year, “the country ranked 144th among 183 countries and also last among the ASEAN-6 in the International Finance Corporation/World Bank’s (IFC/WB) Doing Business 2010 Report.”

Red tape

In the 2011 Doing Business Report, the country was 148th in terms of ease of doing business with and “was listed among the countries with high number of procedures for starting a business, although wide differences exist across different Philippine cities.”

The Aquino administration’s economic master plan also admitted that, “there is broad agreement that the process of applying for a business renewal registration is a long, difficult, and tedious process. Starting a business in a Philippine city involves an average of 15 procedures, takes 38 days, and costs 29.7 percent of income per capita.”

Aquino admin’s targets

To address the red tape debacle, Aquino’s economic planners said national and local government-level “improvements in the Business Registration/Permits and Licensing System (BPLS) shall be pursued.”

“The BPLS will help standardize the procedures for acquiring permits and licenses to operate new business. It will not only reduce the time to secure permits but also eliminate corruption by limiting face-to-face contacts between the applicant and regulator,” the Aquino PDP said.

Among the Aquino administration’s specific economic goals by 2016 are:

$91.5 billion in annual merchandise exports

US$28.9 billion in annual services exports

P3.79 trillion in cumulative approved investments

a doubling of annual visitor arrivals to six million

$4.5 billion in annual tourist receipts and

a national goal of six million jobs cumulatively generated.

— With Earl Victor Rosero/VS, GMA News