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Home > LAWREVS > WILJ > Vol. 1 > No. 1 (1993)

 

Washington International Law Journal

John F. Pierce

Abstract

The Philippine Government's efforts to attract foreign direct investments have been ineffectual, especially when compared with the efforts of its Southeast Asian neighbors. Foreign investment incentive legislation has been relatively ineffectual in attracting the investment the Philippines sought due to the ambiguous and arbitrary execution of its investment laws and policies. The Philippine Judiciary's unsettled attitude toward foreign investment further enhanced the overall impression that the Philippines was not a safe or stable investment host country. The Philippines' most recent legislative attempt to lure foreign investment is the Foreign Investments Act of 1991. The Foreign Investments Act goes much further than its predecessors in liberalizing access to the Philippine economy by promoting more transparent and efficient investment laws and regulations. However, the Foreign Investments Act is potentially marginalized by the Local Governments Code, which diffuses much of the central government's powers to lure and to control foreign investment to local government units, most of whom have diverse development and investment priorities. Thus, the Foreign Investments Act alone is not likely to attract and keep the desired investment. To lure foreign investment, the Philippines should provide some form of efficient investor services that will account for the central and local governments' priorities, differences and needs. This would promote productive and equitable foreign investment by building on the strengths of the Foreign Investments Act while preserving the integrity of local decisions mandated by the Local Governments Code.

First Page

169

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