Mary Louiksy F.

Mosquetes International Political

Economy
AB Foreign Service 301 Sir. Jumel G. Estrañero

Philippine FDI, Issues and Platform of Growth in 2018

“Share what you want”
Foreign Direct Investment (FDI) is an investment made by a company or individual in
one country in business interests in another country, in the form of either establishing
business operations or acquiring business assets in the other country, such as
ownership or controlling interest in a foreign company. (“What is 'Foreign Direct
Investment - FDI',” n.d.) Brazil is the largest recipient of Foreign Direct Investment(FDI)
in Latin America. FDI it is the long-term investment in a foreign country. FDI main
objectives is to establish lasting interest, lasting interest implies the existence of long-
term empathy between direct investor and direct investment enterprise. According to
OECD, an ownership of 10% of voting power by foreign investors is evidence such a
relationship. There are two types of FDI, the greenfield investment and brownfield
investment. Greenfield investment is a form of FDI where a parent company start a new
project in a foreign country by constructing new operational facilities, also creates long
term job in foreign country by hiring new employees, the example of this is McDonalds
and Starbucks. the second type of FDI is brownfield investment also know as cross
borders mergers and purchasing od an existing production or business facility by
company for starting new product or service. Example for brownfield investments are
the abandoned and out of business commercial enterprise like gasoline station and
other abandoned buildings.
Foreign Direct Investment can help the state to attract new business investment,
supporting the expansion of existing industry and small businesses and attracting tourist
from and within t and outside the country. Also, FDI have pros and cons, the cons of FDI
is that multinational corporation bring their own management team, if one country will go
to the host country and get something like, example when China will get fishes to
Philippines, China’s management team will be at the Philippines fishing place they are
simply taking advantage. Host countries that are being abused by the foreign
companies since they are least distressed about the economic problems of host
countries like unemployment, and poverty issues. Also there are pros for FDI, the
advantages of FDI benefits the global economy as well as the inventors and receiver.
Philippines can directly engage with the Southeast Asian neighbors, United States and
Uzbekistan. Uzbekistan is a doubly landlocked Central Asian Sovereign state
(Wikipedia, the free encyclopedia, 2018) Philippines expressed interest to establish
direct contacts between the representatives of the business of the two countries for
further development of trade and economic relation. Philippines and Uzbekistan
expressed mutual interest to continue their joint economic cooperation.
The major challenges of the Philippines in FDI, Philippines still suffering from
unemployment issues. Philippines government should do anything about this because
they are the to have the power to do. Because Philippines have many multinational
corporations, some industries require higher skilled labor therefore, multinationals will
invest in those countries with a merge of low wages, but high labor productivity and
skills. One of the key factor in the desirability of investment are the transport costs and
levels of infrastructure. Countries with access to the sea are at an advantage to
landlocked countries, who will have higher costs to ship goods.