The Dynamics of Foreign Direct Investment in the Philippines Reviewing the Role of Government Policies, Risks, and Benefits of Fostering Economic Growth and Development (2024)

See all articles by Cristina Duldulao

Cristina Duldulao

World Citi Colleges-Quezon City-Graduate School Department

Hannavi Franco

World Citi Colleges - Quezon City - Graduate School Department

Florinda Vigonte

World Citi Colleges - Quezon City - Graduate School Department

Marmelo V. Abante

World Citi Colleges - Quezon City - Graduate School Department

Abstract

This study examines the dynamics of foreign direct investment (FDI) in the Philippines and the role of government policies, risks, and benefits in fostering economic growth and development. The research finds that government policies play a crucial role in attracting FDI, with the Philippine government implementing various measures to encourage foreign investors. However, risks associated with investing in the country, such as political instability and infrastructure challenges, have limited FDI inflows. While FDI in the natural resource sector or light industry has indeed helped the economies grow, such growth has been at the expense of environmental quality and labor protection in some cases. The study also identifies several benefits of FDI, including job creation, technology transfer, and increased exports. Overall, the research underscores the importance of government policies in fostering FDI and highlights the need for continued efforts to mitigate risks and maximize the benefits of foreign investment for Philippine economic growth and development. In conclusion, this study also highlights how the government deals with the challenges of how currency fluctuations affect the economy. Moreover, the study also notes that FDI in certain sectors has had negative impacts on environmental quality and labor protection. Therefore, the study emphasizes the need for sustained efforts to mitigate risks and maximize the benefits of FDI for the economic growth and development of the nation. The government needs to establish a balance between attracting foreign direct investment and ensuring environmental sustainability and labor protection. This study provides valuable insights into the complexities of FDI in the Philippines and emphasizes the significance of strategic policies and actions to maximize its economic development potential.