Business and Economic Update
Issue 02
Publisher's Note

This is our second issue; a bit late for the month but here it is. We received a few, positive feedback for our first issue last June as we tackled not only basic regional but also global macroeconomic scanning. We notice that it is a good way to analyze the Philippine economy, its potentials and weaknesses, if viewed in relation to its neighbors in the ASEAN, in North Asia and major economies of the world.

The ASEAN Economic Community (AEC) is just five months away. Definitely there are threats to certain sectors and sub-sectors of the economy as the region of some 620 million consumers, the third biggest in the world after China and India, becomes more integrated. Such economic integration is not only about complementation but also about competition and substitution.

But economic integration will produce more benefits and opportunities than costs and weaknesses, so long as companies and people keep their creativity and innovation. For instance, what used to be a lesser known company in Manila or Cebu can become a big supplier of certain goods or services in the region as demand for its products suddenly rise.

In this issue, we will focus on foreign direct investments (FDIs). How much are we getting or attracting in the Philippines compared to our neighbors, the inflows and outflows of capital, the stock of foreign investments through time, the “greenfield” investments, and from what countries FDIs in the Philippines come from.

These information can give us some business insights like while the Philippines may be lagging many of its neighbors in FDI/total investments ratio, our level is better than other emerging or industrialized economies. So it is not something to commiserate. Besides, the slack in investments is compensated by high remittances and exports of services like the BPO sector.

We hope you will find these data and analysis useful for your business decision making.


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