The Republic of Philippines is an island country and a unitary sovereign state located in the South East of Asia. The current population of the Philippines is 104,597,900 and its population density is 340.7 people per square kilometer. The Philippines is made up of about 7,640 islands located in the western Pacific Ocean, from north to south these islands are categorized under three major geographical divisions; Mindanao, Luzon and Visayas. The most populated city is Quezon City while Manila is the country’s capital city. This paper aims at reporting on the suitability of Philippines as a country for investment (Ferraren & Tamayo 2016).
Since the Philippines islands are densely populated, there are over one hundred and seventy Ethno linguistic Nations present in these islands whereby the majority originated from the Austronesian languages. The low-land coastal regions and many other regions adopted various cultural elements and also converted to Christianity. Examples of Ethno linguistic languages include; Subanon, Cebuano, Tagalog, Panganisian and many more. Islam is widely practiced in Sulu Archipelago and western Mindanao. Lumad is a collection of native ethnic groups found in Mindanao highlands and The Agusan Marsh. Among the early settlers of the Philippines are the pre-Austronesian immigrants from Africa called the Negrito and their tribal groups are Aeta and Ati (Schuster, Balbosa, Tang, Komatsuzaki, & Peiris 2017). The cultures and the ways of life of the Negrito are free of Islamic and Western influences. A large portion of the Philippine population is Malayo-Polynesian which is a significant family within the family of the Austronesian language. The minority of the Philippine population is made up of other ethno linguistic nations. These include Latin Americans, Chinese, Spanish, Japanese, Castilian and English (Scheela 2016).
Philippines is Asia’s 13th largest economy and 34th World’s largest economy. By using the GDP per capita values this country is ranked as the sixth richest country in south East Asia and also one of the heavily emerging markets after Indonesia, Thailand and Malaysia. The Philippines is considered as newly industrialized country whose economy transits from being an agricultural based economy to a service and manufacturing economy. The Country’s GDP as of 2017 by purchasing power parity was $878.979 billion (Salerno 2014). According to the UN Human Development index rankings, Philippines occupies the 116th position with an index of 0.684.
As of 2016 the economy of Philippines was; $GDP was 798.980 billion, the rate of inflation was 4.1%, GDP growth rate was 7.7%. The total exported goods were $ 58.76 billion, GDP Per Capita $ 6,700, Imports $ 80.23 billion, Public sector debt; 54.45% of Agriculture: 14.43 % GDP industry: 34.56% services: 54.89. The economic strengths of the Philippines are business processes, large agriculture sector, mining, manufacturing outsourcing, services- tourism and beverages, foreign workers manufacturing electronics Remittance Hi-tech components and the industrial sector (Li, Jiang, Long, Tang & Wu 2014). While the economy of Malaysia is significantly affected by Asian crisis, has experienced a rapid economic boom, emerged as a multi-sector economy and has been a center of trade for decades. The GDP of Malaysia as of 2016 was $ 1.03Trillion; the rates of inflation experienced were 2.7%, Public debt: 58.06% of 8.4%, GDP per capita $ 32,456. GDP per sector: services 49.55%, industry 40.45% and agriculture 11.21%. The economic strengths are timber, rubber, cocoa, and palm oil (Ferraren & Tamayo 2016).
The Philippines government is governed under a democratic presidential representative and as a unitary state. The republic is constitutional whereby multi-party democracy is practiced and the president functions as head of government and also as the head of state. The democracy of Philippines is illiberal established by President Rodrigo Duterte. A good Example of Philosophers who were in great support of illiberal democracies is John Rawls (Moretti & Pestre 2015). The Philippine government is made up of the judiciary, legislature and executive branches. The power of these three branches is vested by the Philippine constitution in the following: The Philippine congress vests the legislative power whereby the House of Representatives is the lower chamber while the senate is the upper chamber. The judicial power is vested in the courts with the highest court being the Supreme Court while the executive power under the president’s leadership is exercised by the government (Li, Jiang, Long, Tang & Wu 2014). The Republic of the Philippines is governed by the constitution and its final draft was complete on the 12th of October 1986 by the constitutional Commission and in 1987 it was ratified by nationwide plebiscite. The government controls all the sectors of the economy from agriculture to service industry (Castles 2014).
An Independent Commission on Elections holds the elections every three years on every second Monday of May, on the following 30th of June the election winners take office. The Philippine Republic being a multi-party government has many political Parties including Democratic Action, New Society Movement, People Power-Christian Muslim Democratic and The Liberal party being the most popular party (Castles 2014). The most recent election was held in 2016 May whereby Rodrigo Duterte emerged as the duly elected President of the Philippines. The Philippine has a large voter turnout when it comes to elections, voting is a personal choice and nobody is forced to do so (Salerno 2014). President Rodrigo Duterte has ushered in political changes by establishing an illiberal democracy in the country. The next election will be held after six years which is approximated to be in 2022
The Philippines is a democratic country, and it implies that democracy gives the Filipino people the chance to participate in the creation, proposal and the development of laws or employ the use elected representatives. The people are free and have a say in the decisions made, but sometimes their rights are abused. The country will encourage the opening of a new business as freedom allows the numerous entrepreneurs to take the risk of opening of new markets. According to the Philippine constitution, all members of the country are protected by law and allowed their freedom of speech and rights to peaceful assembly. As long as the expression is not defamatory, the Filipino people are allowed to express themselves and voice out the ideas they want to be heard by the government. It is not to say that the protests are not violent as there are reported cases of people getting hurt in exercising their rights (Moretti & Pestre 2015).
The rise in the number of extrajudicial killings in the recent years has become a human rights situation in the country, and the international community has taken an interest in addressing the matter. All the stakeholders in the country including the judiciary, commission on human rights and the government has taken an interest in the subject and are working together to address the issue of disappearances and killings (Castles 2014). Apart from the disappearances and extrajudicial murder, the country has problems that relate to its social, cultural, economic and political climates and they contribute to the human rights problems.
The banking system in the Philippines actively offers financial help to business ventures as well as the nonbusiness activities such as the sponsoring of projects and sports teams in the country. The banking system carries various types of banks such as small rural banks, commercial banks, credit unions as well as thrift banks. There are over a hundred banks in the country that are allowed to operate under the license of the Central Bank of Philippines as required by the Republic Act. Apart from the banks, the nation suffers a shortage in the developing of the local private property market. The regulations on private property are weak, and the nation is doing almost nothing in advancing the property rights. For the reasons of national security the state only allows foreign land ownership at just forty percent (Moretti & Pestre 2015). Corruption levels in the nation are high and mainly contribute to the lack of financial transparency seen in the country. Land development is rigged with zoning that is discriminative, the appreciation charges are excessively high, and there is overpricing of land that is sold to developers.
The Filipino government has passed laws that support foreign investors as it seeks to promote its economic development. One of the regulations put in place includes the Board of Investments. The work of the board is to develop and regulate the investments into the Philippines. The Board of Investments administers the Investment Priorities Plan which identifies the economic activities that could be potentially profitable as approved by the president (Salerno 2014). The agencies that operate within the countries are encouraged to be consistent with the Investment Priorities Plan by adapting to the policies of regulation. The attitude of the nation toward foreign direct investment shows that the Philippines is actively seeking foreign investment to promote its economic development (Salerno 2014). It can be observed that the Filipino laws treat the foreign investors the same apart from the areas reserved for Filipinos by the Investment Act in the Philippine constitution. The investment landscape in the Philippines has its advantages as it favors the possibilities of investments by setting up of free trade zones that are run by the Philippine Economic Zone Authority.
We can do it today.
Another essential factor to consider in the investing in the Philippines is the labor force it provides. The country has a promising quality of labor force that aligns with the minimum wage that is favorable to foreign investors. The costs of housing, electricity, and communications are lower which means that the labor costs are low and this is beneficial for investors who want to save in hiring of Filipino labor force. The human resources and the pool of talents available in the country make it valuable for investment (Scheela 2016). The professional pool is enriched annually with the addition of the over three hundred thousand graduates who flood the market. The literacy levels in the country are quite high, and this is advantageous as it promotes fast and easy communication making it an attractive business outsourcing location.
All in all, the Philippines provide opportunities that will satisfy foreign investors and lure them to invest in the country. For both the receipts of the investment and the investors themselves, the direct investment by foreign investment will offer advantages. The foreign investment will provide an opportunity to make the profit as well as the humanitarian effort to improve the standards of living for the country. Since the primary aim of investors is to with the least amount of risk gain the considerable amount of profit from the money invested, the Philippines will give a chance to do the same. The country needs to improve its infrastructure and maintain its reform momentum to brighten its investment prospects. Investors will continue coming to the country as long as it provides the development and proper service that attracts investors.
- Castles, I. (2014). 13. The Mismeasure of Nations: A Review Essay on the Human Development Report 19981. Measuring and promoting wellbeing: how important is, 281.
- Ferraren, S., & Tamayo, A. (2016). Financial intelligence of business process outsourcing professional in Davao City Philippines.
- Li, Y., Jiang, S., Long, D., Tang, H., & Wu, J. (2014). An exploratory study of business angels in China: a research note. Venture Capital, 16(1), 69-83.
- Moretti, F., & Pestre, D. (2015). Bankspeak: the language of World Bank reports. New Left Review, 92, 75-99.
- Salerno, T. (2014). Capitalising on the financialisation of agriculture: Cargill’s land investment techniques in the Philippines. Third World Quarterly, 35(9), 1709-1727.
- Scheela, W. (2014). Venture capital in Asia: Investing in emerging countries. Business Expert Press. Harrison, R. T. (2017). The internationalisation of business angel investment activity: a review and research agenda. Venture Capital, 19(1-2), 119-127.
- Scheela, W. (2016). Global Entrepreneurship: Past, Present & Future.
- Schuster, S., Balbosa, J., Tang, C., Komatsuzaki, T., & Peiris, S. J. (2017). Scaling Up Infrastructure Investment in the Philippines: Role of Public–Private Partnership and Issues.