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THE PHILIPPINES is still in the best position to attract foreign direct investments (FDIs) despite the current political turmoil besetting the Arroyo government, said an international financial analyst.
"You have done so much in moving your economy forward. You have high growth rate and low inflation rate which investors like," said Nicholas Kwan, Standard Chartered Bank (Hong Kong) Ltd. regional head for research in Asia.
Kwan said recently that challenges such as lack of infrastructure and presence of red tape are not enough reasons to discourage investors.
Investors' confidence can still be seen in the number of FDIs in the country, he said.
An FDI-led economic upturn has also been noted in Cebu where FDIs capitalize on the province's rich talent pool, effective public-private partnership, and improving and growing infrastructure, according to Joel Mari Yu, managing director of Cebu Investment Promotions Center.
"FDIs are the single biggest contributor to Cebu's economy," Yu told officials of various foreign chambers during the Anti-Smuggling Dialog at the Marco Polo Plaza last week.
Yu said 1993 export earnings reached $1 billion with $500 million coming from local export companies, and foreign companies operating mostly in export processing zones accounting for the other half.
In 2007, total export earnings reached $5 billion where $500 million came from local export companies – the same amount the sector earned 14 years ago.
Of the $5 billion, Yu said $4.5 billion came from foreign companies, which shows the role of FDIs in providing employment and generating income.
The flat growth of the local export industry is due to the low value of the peso against the dollar as most furniture companies export to the United States, said Ruby Salutan,.executive director of the Cebu Furniture Industries Foundation.
Around 41 percent of Cebu's exports were shipped to the US in 2004, while almost 60 percent of the remittances from overseas Filipino workers are dollar-based. /Reporter Cris Evert Lato
