Kyle L.

Bonador International Political Economy

AB Foreign Service 302 Mr. Jumel G. Estrañero

The Developing Foreign Direct Investments in the Philippines

Foreign direct investment is a kind of investment done by an indivual or a company from one
country to another, specifically business interest. It is in the form of of either establishing business
operations or acquiring business assets in the other country, such as ownership or controlling interest in
a foreign company. Countries with less requirements, tariffs, and taxes are where foreign investors usually
prefer to operate in. This is an economic foundation to developing market countries with promising
growth like the Philippines. FDI produce more growth compared to what domestic investments can.
Foreign direct investments trigger domestic establishments to develop to attract investments from other
country. It is a source of development and can boost employment. Trade among countries also become
easier in the presence of foreign direct investments. As foreign investors open new firms, employees may
develop to be more skilled and globally valued. For countries like Philippines, it is also an opportunity of
getting resources that are abundant in other countries as resource transfer is a primary characteristic of
FDI. Technological development is also a possible outcome of FDI as it may introduce modern technology
to developing countries. On the other hand, this may also cause domestic firms to deteriorate. Culture of
host country is also in line as colonialism is possible in the presence of FDI.

Investments from developed countries like Japan, Singapore and United States is great but it is
also important to be in new engagement to developing countries like India, Indonesia, Malaysia and
Thailand. Other countries that are pro-business will also make good partners. It is a little risky to be
partners with developed states as they may be taking advantage and not both countries may have the
opportunity for growth.

Increasing costs of goods is one major challenge of FDI that is currently being faced by the
Philippines. As job opportunities come in, price hike follows making the economy of the Philippines shaky
as before. FDIs are seen as favorable to developing countries like the Philippines, today. Since poverty is
enormously present in the Philippines, FDIs give large contributions to the economy of the country as it
provide job opportunities for Filipinos. As we depend on FDIs, we must ensure that we get all of the
benefits we can in return of the benefits the investors get from us.