Legarda expresses concern over declining FDIs

SENATOR Loren Legarda on Monday expressed alarm over the decline of the net foreign direct investment (FDI) to the Philippines as of the first half of 2017.

Legarda said that FDIs are an important measure in job generation, and its decline is a cause for concern.

Figures from the Bangko Sentral ng Pilipinas (BSP) show that net FDIs for the period January-June 2017 show a decline of 14 percent or USD $3.59-billion from USD 4.18-billion during the same period in 2016.

This is in contrast to past figures showing, which showed FDIs going on an upward trend from 2011 until 2016. Net FDIs in 2011 were at USD $2-billion, which steadily increased in the succeeding years, and were highest in 2016 at USD 7.97-billion.

Legarda, Chair of the Senate Committee on Finance, raised this concern during the hearing of the proposed 2018 budget of the National Economic and Development Authority (Neda).

The Senate finance committee chair asked Neda Director-General Ernesto Pernia what countermeasures are being undertaken to arrest the decline.

“We want to know what factors came into play that led to the decline?” Legarda inquired.

Legarda also took note of the recent decline of the peso and asked Pernia the extent of the impact of the decline in net FDIs on the peso’s continued depreciation against the US dollar, as well as its effect on paid employment in the country.

Pernia said that one of the reasons could be the country’s lengthy foreign investment negative list (FINL), which needs to be liberalized.

He also pointed out that policies on ease of doing business and simplifying restrictions on investments, which are part of the Legislative-Executive Development Advisory Council’s (Ledac) list of priority legislative measures, could counter the problem, thus these measures should be fast-tracked and passed within the year.

Legarda cited certain stumbling blocks in the whole governmental process, namely, (1) unnecessary and redundant data, as well as regulatory and enforcement mandates; (2) the unpredictability of customs procedures from port to port; (3) poor or inadequate infrastructure; (4) corruption in ports of entry; and (5) lack of clarity on regulations and enforcement.

“We need to fix these issues now. Even without new legislation, the government has to address challenges while working within the existing policy framework in order to attract more investors,” Legarda concluded. (SunStar Philippines)

Source: Sunstar