MANILA, Philippines - Several Southeast Asian economies enjoyed as much as a 5-fold increase in foreign direct investments (FDI) last year while the Philippines was recording a decline, United Nations data released on Monday showed.
The national elections in May and the ensuing government transition, said local observers, possibly caused the hesitation, which was also exacerbated by the country’s allegedly unattractive business climate.
FDI flows into Malaysia, Indonesia and Singapore in 2010 were estimated to have surged by triple-digit rates from yearago levels as Southeast Asia was among the regions that led the global economic recovery, the UN Commission on Trade and Development (UNCTAD) said in its Global Investment Trends Monitor.
Malaysia was projected to have grown its FDI by 410% to $7 billion while Indonesia similarly enjoyed a 163% rise to $12.8 billion, the UN agency said, annualizing available data for the three quarters of 2010.
Singapore, meanwhile, likely saw FDI levels grow by 123% to 16.8 billion.
These improvements allowed inflows to South, East and Southeast Asia to rise by 17.8% to $274.6 billion while the global average flattened to $1.122 trillion in the same year, the UNCTAD said.
Full-year estimates for the Philippines were not included in the report but the country, according to latest central bank data, recorded an annual 36.5% decline in FDI as of October.
The disparity was likely caused by last year’s elections, University of the Philippines economist Benjamin C. Diokno said in a text message on Wednesday.
"Investors adopted a wait-and-see attitude given the change in political leadership," Mr. Diokno said.
He added that the high level of investments already in neighboring economies allowed them to enjoy a faster recovery as well.
Foreign business group officials echoed this but also noted that the country’s perennial lack of competitiveness was also to blame.
"We’re not competitive," American Chamber of Commerce of the Philippines Executive Director Robert M. Sears said in a telephone interview.
"It behooves the administration to realize that all three [branches of government] from the executive, legislative and judiciary have to work together to improve the country’s investment image."
Long-proposed moves to improve infrastructure have just started, European Chamber of Commerce of the Philippines Executive Director Henry J. Schumacher said in a text message.