Senate Minority Leader Franklin M. Drilon expressed alarm yesterday over the capability of the government to attract new foreign investments.

Drilon raised this concern when it was revealed during the Senate plenary debate hearing on the proposed P8.9 billion budget of the National Economic Development Authority (NEDA) that new investment in the first half of 2017 plunged 90.3 percent from the same period in 2016.

He also raised concern over the continued depreciation of the Philippine peso while the currencies of its Southeast Asian neighbors are appreciating.

Drilon said latest Foreign Direct Investment (FDI) shows a significant deceleration in the influx of new investments.

He cited data from the Bangko Sentral ng Pilipinas (BSP) which showed that foreign equity placements other than reinvestments of earnings decreased by 90.3 percent during the first six months of 2017 ($141 million) vis-à-vis the same period in 2016 ($1.448 billion).

“We note from the reports that there is a deceleration in new investment. This is very alarming. Why such a huge drop? Is this an indication of anything?” Drilon asked.

The questions were directed at Sen. Loren Legarda who was explaining on the Senate floor the different budgets of government departments, agencies and constitutional offices in the proposed 2018 P3.76 trillion national budget.

Drilon said that the NEDA has a lot to explain about this huge drop in new foreign investments, saying this is “reflective of confidence of foreign business on our country.”

“If we are to attract new foreign investment, then it is about time that we take a serious look at how things are going on in our country, because new investment would not come in unless we are able to raise the investors’ confidence level on our country,” Drilon pointed out.

Citing a study conducted by The 2018 ASEAN (Association of Southeast Asian Nations) Business Outlook Survey published by the American Chamber of Commerce in Singapore and the US Chamber of Commerce, Drilon said among the companies surveyed, only 22 percent chose the Philippines as a possible expansion location, with Vietnam topping the list at 34 percent.

The Philippines ranked sixth, lagging behind Vietnam, Myanmar (29 percent), Indonesia (29 percent) Thailand (26 percent), and Cambodia (23 percent).

Drilon, a member of the Senate minority group, said that FDI is critical to the country’s economic growth and contributes in providing job and business opportunities to Filipinos.

Thus, the national government should seriously consider this huge decline in FDIs, he stressed.

Drilon pointed to the current political climate in the country as among the possible “stumbling blocks” that discourage foreign investors.

In response to Drilon’s questions regarding the huge drop in new investment, Legarda relayed NEDA’s explanation that it was caused by some restrictions.

However, even Legarda admitted that she does not agree on the answer: “I am told that it is because of certain restrictions. I do not agree with that answer because these restrictions were already there when there was an increase.”

To which Drilon replied, “I admire your candor.”

“I am candid because I am very concerned. I cannot sugarcoat something because the figure would not lie,” Legarda replied. “I cannot create answers if I am not supplied the justification for the decline in the foreign direct investment,’’ she added.

Source: https://www.pressreader.com/philippines/manila-bulletin/20171008/281590945778065