Short-Term Investments, Long-Term Adverse Effects

March 11, 2024

The Philippines is among the most open economies in Southeast Asia. It is more open than most of its neighboring countries, and certainly much more open than industrial powers China, South Korea, and Taiwan during their economic take-off in the 1970s and the 1980s. Even the 1987 Constitution isn’t that restrictive anymore because of laws passed to bypass its foreign equity restrictions for the benefit of foreign capital and their domestic oligarch partners.

Economic cha-cha advocates insist that more FDI will spur more economic development. However, more does not necessarily mean better and the short- and long-term impacts of unregulated foreign investment can be more damaging than the projected benefits.