DESPITE the concerted misinformation, by the Yellow Cult here and the US East Coast media, against President Duterte’s administration, foreign direct investments in his first 21 months in office (July 2016 to March 2018), totaled $16 billion. This is four times the $4 billion investments during a similar period (July 2010 to March 2012) under former President Benigno Aquino 3rd.
These data are from the Bangko Sentral ng Pilipinas, specifically from the data base in its website. The quarterly data shows a robust, consistent growth pattern (see graph), with the lowest level of foreign direct investments (FDI) in the first quarter of 2017, $1.5 billion, even bigger than the peak level during the Aquino administration of $1.4 billion in the third quarter of 2016.
FDI for Duterte’s first full year in office, in 2017, amounted to $10 billion, according to the BSP data. Having been an economic reporter for most of my journalistic career, I was skeptical about this figure when the finance department issued a press release reporting this. I checked the figure at the BSP data base, month for month, which turned out to be accurate.
As any long-time observer of Philippine economics will instantly realize, the $10-billion figure of FDI in our country’s economic history is an “off-the-charts” development, as annual FDI in the Philippines for decades has been only in the $2 billion level. To be fair to the past administration though, total FDI in 2016 started to rise in 2014 and 2015, reaching $8.3 billion in 2016, with more than half of this entering the country after Duterte took power.
Whatever one’s political color, as Filipinos, we should be happy over these FDI flows, which is really an earth-shaking development. For the first time since the mid-1970s, there is a momentum in FDI flows: from about $3 billion average annual 2012 and 2013, to $5.7 billion in 2014 and 2015, to $8.3 billion in 2016, and $10 billion in 2017. The momentum appears to be continuing as the FDI for the first quarter of this year totaled $3.6 billion, twice the $2 billion in the first quarter of 2017.
I cannot underestimate the fact that such momentum in FDI inflows marked the economic take-off of such now-developed countries as Singapore, Thailand and Malaysia. We hope that the momentum is maintained.
One reason that gives me optimism over our economy at present is that the distribution of FDIs has changed for the better. For 2017, 13 percent of FDIs went to manufacturing while another 16 percent went to “electricity, gas, steam and airconditioning supplies” classification. In the past decade, it had been concentrated on financial services and real estate.
The BSP data totally belies the Yellow propagandists’ claim of an economy going down under Duterte.
One columnist in Business World, a newspaper which through layers of companies is controlled by the Indonesian tycoon Anthoni Salim, even made a silly claim that “Duterte’s drama only gave investors reasons not to invest in the Philippines.”
Pro-Aquino writer Richard Heydarian (“Aquino injected morality into the heart of the Philippines’ long-cynical politics,” he wrote in one article) in a piece titled “More Duterte fallout on the Philippine economy” in the Asian Nikkei Review — unfortunately for us distributed worldwide — claimed that foreign investors were shunning the country.
“During the first half of 2017, there was a 90 percent year-on-year drop in new investment pledges from $1.45 billion to $141 million. During Duterte’s first year in office, South Korean investments plunged by 93 percent, while American investments dropped by 70 percent.”
Other than the data I have presented here that totally contradicts this writer’s claims, Heydarian doesn’t understand economic reporting terms, as a finance department rebuttal of his article explained.
“Investment pledges” as reported by government are those which foreign investors register with the Board of Investments and export processing zones in order to claim fiscal incentives such as tax holidays. I haven’t checked this particular data of Heydarian’s, but even if it is true, and considering the data I have presented, it actually represents a positive development — that foreign investors are coming in even without fiscal incentives.
What is sad — although typical of Yellow propagandists — is that even when facts stare them in the face, they refuse to admit their lies.
In his column in the Philippine Daily Inquirer yesterday, he claims in a boastful manner: “All the figures and data used in my column were thoroughly fact-checked (anyone who writes for world-class publications should know this) and, crucially, are based on data provided by the Philippine government itself, namely the National Economic and Development Authority, Bangko Sentral ng Pilipinas (BSP), and Philippine Statistics Authority.”
It was quite obvious though that Hydarian, who boasts of being an accomplished academic, hadn’t checked his data on foreign investments from the institution that actually monitors these, the BSP.
Heydarian either is so intellectually dishonest or just a plain ignoramus in the field of economic reporting when he tried to wiggle out of the false data he disseminated in an international venue by writing:” The DoF is correct to highlight the increase in ‘approved’ FDI recently, a record-high $10 billion in 2017 and growing by 44 percent in the first quarter of 2018. Yet, ‘pledges’ of investments are also an important indicator of business confidence in the country.”
First of all, the DoF figures are from the BSP, and these are not “approved” FDI, but actual inflows as reported to the BSP by banks used by the foreign investors to remit their investments to the country. Secondly, “pledges” are, as any greenhorn economic reporter knows, not worth the paper of the press releases that report them. For every trip abroad that Aquino made, his PR would claim billions of dollars in pledges, but just a trickle of these came in.
I wonder why Heydarian is so critical of the country at this time when a momentum is building up for an explosion of FDIs into the country, to the extent of spreading falsehoods intended to discourage gullible investors from coming into the Philippines? Is he Filipino, or a dual citizen, or even a triple citizen, the other nationality being Iranian? I’ve got to fact-check that.
Heydarian at any rate should stick to his field of choice, international politics in which concepts are so fuzzy — “projections of power”, “multi-polarity ” — that a careless researcher like him could get easily away with wrong conclusions. Even if not exact, economics is a bit more intellectually rigorous.