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| Source: https://ift.tt/2y10bl9 |
Senator Pork-chop Drilon recently raised the alarm about the huge drop in foreign investor confidence in the Philippines. He said during the budget deliberation hearing for the National Economic Development Authority (NEDA) that there was a 90.3{560c5a826b9d0f79d9056f2e452d35fface599afff45834a592fa1a3f7fd1a74} drop in foreign equity placement in the first half of the year 2017 compared to the first half of the year in 2016. He then said the sharp decline in foreign investment in the country is reflective of confidence of foreign business in our country. He then claimed that the reason why foreign investors are not confident in the Philippines is due to the political climate. Drilon further said that this drop in foreign direct investment is exacerbated by the continued decline of the peso. He said that if nothing is done about these figures the country’s economy will be harmed.
Is Pork-chop Drilon correct? To answer that question one has to understand what he meant by a drop in foreign equity placement. Drilon in his comments obfuscated the facts in order to spin it towards hi own political agenda. The figure he quoted was for foreign equity investment but is this reflective of investor confidence? What is foreign equity investment in the first place? It is the amount of money foreigners invest in equity (ie. stocks and bonds). This is clearly just one aspect of foreign investment as a foreigner can invest directly on a domestic business/ project. Drilon was obviously trying to use foreign equity investment decline as a catch all for all investment types in the Philippines. He also said there was a 90.3{560c5a826b9d0f79d9056f2e452d35fface599afff45834a592fa1a3f7fd1a74} decline in equity placements – this is a lie. Here is the link to the BSP data he mentioned. The number he quoted was the total of equity placements less withdrawals. There was actually $471 million worth of equity placements in first half of 2017 not $141 million that Drilon mentioned. This is readily verifiable information that ABS-CBN did not bother to fact-check because they are content in their role as propaganda machine of the Liberal Party.
Another problem I have with Drilon’s statement is the fact that equity investment is not the whole picture and foreign investment is not the most important factor for the success of an economy. In order to see the full investment climate in the Philippines you have to look at direct investments since these types of investments require a more long-term commitment to the economy so it is the best measure of confidence. Equity investment is very speculative and is mostly chasing margins rather than a long-term commitment. So how is Duterte doing with foreign direct investments?
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| Source: https://psa.gov.ph/foreign-investments-press-releases/tables/2017{560c5a826b9d0f79d9056f2e452d35fface599afff45834a592fa1a3f7fd1a74}20Q2 |
The table below shows you the growth of Foreign vs Filipino direct investment in the Philippines from Q2_2016 – Q2_2017. What you will notice is that there was actually an increase in total direct investments in the Philippines in Q2_2017 compared to Q2_2016. Yes there was a decline of Foreign direct investment in the Philippines but there was a more significant increase in direct investment by Filipinos. This is great news because a country whose residents are able to sustain significant investment growth is a healthier economy than one whose growth is driven by external foreign capital. This data shows that Filipinos are investing heavily – more heavily – in the economy. Their confidence is reflected in this and their confidence is what matters the most. Not some white skinned asshole thousands of kilometera away. Compare that to PNoy’s Q2_2011 performance and what do you see?
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| Source: https://psa.gov.ph/foreign-investments-press-releases/tables/2011{560c5a826b9d0f79d9056f2e452d35fface599afff45834a592fa1a3f7fd1a74}20Q2 |
Not only did PNoy see a drop in total investments in Q2_2011 but there was also a drop in Filipino direct investments. Yes he did see a sharp increase in Foreign direct investment in Q2_2011 which was a clear reflection of the kind of administration the Liberal Party was. They were so addicted to foreign influence that they did not care about Filipino confidence and well-being. Foreign direct investment is not always beneficial and it is even very often pernicious. Here is a breakdown of PNoy’s foreign direct investments by Industry. Notice how big a growth Mining and Manufacturing had in Q2_2011. Now notice how much foreign investments PNoy attracted in Professional, scientific and technical activities and Education, investments in these industries are investments in our human capital as a country – the picture we see from PNoy is that foreigners are more interested in our resources rather than our people. In short we were mere slaves to them and PNoy and the LP promoted this.
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| Source: https://psa.gov.ph/foreign-investments-press-releases/tables/2017{560c5a826b9d0f79d9056f2e452d35fface599afff45834a592fa1a3f7fd1a74}20Q2 |
Now let us look at the distribution of Foreign direct investments for the Duterte administration. Notice the drop in foreign direct investment in mining and manufacturing industry. Now notice the sharp increase in foreign direct investment in Professional, Scientific and Technical activities and education. This shows that the Duterte administration is attracting foreign investment in sectors that invest in our country’s human capital. The Duterte administration is attracting foreign investments that ensure the long-term health of our nation, not treating our country as a colony whose resources are to be extracted and their labor exploited.
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| Source: https://psa.gov.ph/foreign-investments-press-releases/tables/2017{560c5a826b9d0f79d9056f2e452d35fface599afff45834a592fa1a3f7fd1a74}20Q2 |
If Pork-chop Drilon and the Liberal Party are really concerned about our country’s health and prosperity, they should be happy about what Duterte is doing. They should be happy with the administration promoting investments in our collective human capital. It is time for our country to transform itself into more than a beautiful archipelago with rich natural resources to be extracted and a pool of unskilled labourers to be exploited. It is time for our country to have a government that promotes investments in a future Philippines of engineers, scientists, doctors, inventors and highly educated professionals. The Liberal party does not see this value because they are set in their minds that the Philippines is only good enough to be raped and pillaged by western colonial powers!
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