Bucked trends and shattered beliefs

Photo: Skyline of the city of Cebu (wiki)

As against our usual fare of negative news, recent numbers released by a few international organizations show inspiring trends.

For one, many readers often believe that the Philippines is not within the radar of international investors, but as preliminary estimates of the United Nations Conference on Trade and Development (UNCTAD) show that FOREIGN DIRECT INVESTMENTS (FDI) to the Philippines rose by almost a third in 2020, a stark contrast with the collapse in global FDI amid the coronavirus disease 2019 (COVID-19) pandemic. In its latest investment trends monitor released on January 25, UNCTAD said that the Philippines bucked the trend as FDI flows went up 29% to $6.4 billion in 2020 from $5 billion in 2019. 

This investor data ties in with recent announcement of Fitch ratings of a stable outlook and a maintenance of the BBB rating, while it has downgraded many other countries. This shows that the government is able to manage its debt levels, gaininv ghte confidence of creditors and ratings agencies.

Likewise, The united Nations Development Program recently released its Human Development Report noting that the country actually increased its Human Development Index by four points in 2020.

One thing is for sure: these numbers come from international organzations. Are they seeing a potential in the country we are not seeing? Unlike the belief of some, the country is actually attracting investors and looks to attract even more, shattering the belief that the country cannot attract investments.

This is because international economists and investors see numbers and not just politics and noise. Upon this, they see long term trends, particularly, how well a market will receive the investments it intends to put in, and how they will make money by investing.

They don’t make investments simply because they like a government. That would be very naive. Rather, its the robust the long term economic growth trends will look like. Factors such as population growth and their incomes in the future matter when you try to see how your investment will fare in ten or twenty years. Not just 2022.