May 12, 2006
IBON: GOV�T FOREGOES P5 FOR EVERY P1 OF FOREIGN DIRECT INVESTMENT
Government apparently foregoes much more in potential revenues than it gets from foreign direct investments (FDI) inflow, according to independent think-tank IBON Foundation.
Data from the Department of Finance showed that in 2003 government lost P300 billion in potential revenues from the provision of fiscal incentives guaranteed under various laws. If this figure remains constant, and comparing this with the net $1.1 billion in FDI recorded by the Bangko Sentral ng Pilipinas (BSP) in 2005 (at an exchange rate of P52:$1), then last year, the government lost some P5.26 in potential revenues for every P1 of net FDI that entered the country.
The above figures question the value of government�s foreign investment promotion policies, which pose a threat to local entrepreneurs and businesses.
The most extreme of these are the current moves to change the Constitution in order to remove economic sovereignty provisions that would lift limitations on foreign ownership of land and allow 100% foreign shareholdings in vital sectors of the local economy.
Foreign investors enter the country primarily to generate profit from the local economy by exploiting the country�s workers and natural resources. Policies that promote economic self-reliance and national patrimony are what the country urgently needs, instead of an economic strategy that opens up the economy at all costs to foreign investors. (end)
IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.