THE Philippine economy is among the fastest growing in the Indo-Pacific Region but needs foreign direct investments (FDIs) to sustain that growth, economist Dr. Bernardo Villegas said.
"Our GDP (gross domestic product) right now is really growing on the basis of consumption — revenge spending, revenge traveling, revenge tourism — and all of us are jumping in joy," Villegas said during the Economic Briefing 2023 last February 23.
However, he stressed the need to bring in more foreign direct investments into the country.
"That is one side of the picture. The other side of the picture is we are not investing. That will jeopardize our future," Villegas added.
Nonetheless, he commended the administration of President Ferdinand Marcos Jr. because he takes action to bring FDIs into the country.
Moreover, one important step to attracting foreign direct investment is the creation of the Maharlika Investment Fund (MIF) "to be the partner of the foreigners," Villegas added.
"Local companies like San Miguel, Ayala, and so on and so forth, but these local companies are running out of local capital because we don't have domestic savings, and they cannot borrow forever. We have reached our borrowing limit because our debt is very high — 60 percent to be exact — so all the other avenues of long-term funding are temporarily banned," the economist explained, referring to the country's debt-to-GDP ratio of 60.9 percent logged last December.
"The MIF can be a very effective tool to attract foreign direct investment," Villegas said.
Source: Manila Times
February 28, 2023
