Philippine Constitution
552 TEXTBOOK ON THE PHILIPPINE CONSTITUTION Sec. 10
Regulation of Foreign Investment.
(1) Sources of investments. – Generally, they are: domestic savings, government expenditures, grants, local and foreign investments, and foreign loans. Investment is expenditure. In economics, it is also called “capital formation”.
(2) Kinds of investments. –It is either direct or indirect in the forms of loans. Direct investments maybe made by a foreigner by: (a) buying stocks or bonds in a local company, (b) entering into a joint venture (corporate partnership) with a local company or host country, or (c) establishing a business concern or a fully-owned subsidiary. The parent company may be a multinational corporation w/c is an enterprise dealing with a broad range of products or services with operations covering more than one country. The country where the investments is made is called the “host country” while the country where the investments comes from is referred to as the “home country”.
(3) Benefits and negative aspects of foreign direct investments. –To the host country, it can be seen as a source of capital. “High” technology, managerial expertise, and employment. On the other hand, foreign investors compete with domestic enterprises, oftentimes repatriate exorbitant profits, may not provide sufficiently large employment, and have been accused of resorting to undesirable business practices disadvantageous to the host country.
(4) Need for foreign investment in the Philippines. – Given the present state of the economy and the inadequacy of domestic savings, and with the government faced with so many
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Foreign direct investment which are put into industries that generate direct contributions to the local economy are to be distinguished from portfolio investments or foreign funds that are placed in the local stock, bond, or money markets on a short-term basis. The Philippines consistently trails its neighbors in both domestic
Regulation of Foreign Investment.
(1) Sources of investments. – Generally, they are: domestic savings, government expenditures, grants, local and foreign investments, and foreign loans. Investment is expenditure. In economics, it is also called “capital formation”.
(2) Kinds of investments. –It is either direct or indirect in the forms of loans. Direct investments maybe made by a foreigner by: (a) buying stocks or bonds in a local company, (b) entering into a joint venture (corporate partnership) with a local company or host country, or (c) establishing a business concern or a fully-owned subsidiary. The parent company may be a multinational corporation w/c is an enterprise dealing with a broad range of products or services with operations covering more than one country. The country where the investments is made is called the “host country” while the country where the investments comes from is referred to as the “home country”.
(3) Benefits and negative aspects of foreign direct investments. –To the host country, it can be seen as a source of capital. “High” technology, managerial expertise, and employment. On the other hand, foreign investors compete with domestic enterprises, oftentimes repatriate exorbitant profits, may not provide sufficiently large employment, and have been accused of resorting to undesirable business practices disadvantageous to the host country.
(4) Need for foreign investment in the Philippines. – Given the present state of the economy and the inadequacy of domestic savings, and with the government faced with so many
__________________
Foreign direct investment which are put into industries that generate direct contributions to the local economy are to be distinguished from portfolio investments or foreign funds that are placed in the local stock, bond, or money markets on a short-term basis. The Philippines consistently trails its neighbors in both domestic