Foreign investment flows fuel economic expansion in Southeast Asia. The Philippines, alas, gets a very small share of this inflow – a factor that might constrain our growth into the medium term.
Growth is important. It is the only way to bring down poverty rates. The rising tide, as they say, lifts all ships.
Also, we need to maintain a certain rate of growth to outpace our mounting national debt. A large portion of next year's budget will go to debt servicing, even as our legislators have produced a draft budget that maximizes looting and limits the productivity of our economy.
There are many things that inhibit the flow of investments into our economy. Our infrastructure is poor. Our policies are constantly shifting, depending on the swirl of domestic politics. Corruption levels are scandalously high. Power costs are intolerable, especially for energy-intensive industries. Our labor costs, given efficiency levels, are comparatively high.
Opportunities for Investment
There are other factors that deserve more attention in making our economy more attractive to investments. We have a small corporate sector and a tiny capital market. Access to capital is therefore more prohibitive.
Ordinarily, direct foreign investments come in raw and are directed to stand-alone projects. However, there are abundant opportunities to draw investments through joint ventures. To attract these investments, we need well-run, innovative, and imaginative corporations.
Recently, a Filipino company, Concrete Stone Corporation (CSC), partnered with Singapore-based SMEC to reduce high logistics costs for construction aggregates, aiming to bring down building costs in the economy.
Efficiency in Construction
The CSC-SMEC partnership will pursue strategies to promote the usage of precast and modular technologies, creating multiple production sites throughout the archipelago, and building a modern fleet of vessels to transport construction materials more efficiently.
Empowered by its partnership with SMEC, CSC has acquired majority ownership of Asiabest Group International, with a focus on infrastructure and property development forecasted to grow in the long term.
The Frankenstein Budget
A former senior government official described the proposed 2025 budget as criminal, labeling it a monstrosity. The document defunds mainline agencies and transfers funds to legislators, prompting a potential constitutionality challenge.
If no acceptable General Appropriations Act (GAA) is ready by the end of the year, the 2024 budget will be reenacted, highlighting the depravity of the legislators involved in crafting the budget.
