Daphney Dee A.

Sugay International Political Economy

AB Foreign Service 301 Sir Jumel G. Estrañero

All About Investments: Foreign Direct Investments in the Philippines

Foreign Direct Investments are also known as long term investments in other foreign
countries.1 These are made by companies or individuals from a local country to engage in
business relations with another country. It occurs when an investor acquires assets in another
foreign country.2 These can be practiced in the form of business operations, acquisition of assets,
and ownership of companies.3

Foreign investments are made to promote the interdependency among countries. These
investments expand finances and gives value to international relations. It is very essential to
developing countries, mostly for the purpose of funding and support. In the time of development,
foreign capital is vital to the countries. These also create jobs and opportunities for the people
who want to engage in investments and strategies. These investments can take place because of
4
many reasons such as, cheaper labor in foreign countries, tax exemptions, etc. The level of
infrastructure and technology increases through time because of the rise of major competitions
all aiming to be on top. However, as some companies rise, the small enterprises tend to lose their
worth and become smaller. These large companies will then try to monopolize the system and
risking political changes, that might lead to expropriation, or when the government controls your
assets. 5

1
A. (2015, April 27). Retrieved March 13, 2018, from https://www.youtube.com/watch?v=2nfAOisdBRw

2 Rupal Tiwari Follow. (2013, September 25). FDI , its advantages and disadvantages. Retrieved March 13, 2018, from
https://www.slideshare.net/RupalTiwari1/fdi-26538521

3
Staff, I. (2018, March 06). Foreign Direct Investment - FDI. Retrieved March 13, 2018, from
https://www.investopedia.com/terms/f/fdi.asp#ixzz59bZsmfm9

4 Rupal Tiwari Follow. (2013, September 25). FDI , its advantages and disadvantages. Retrieved March 13, 2018, from
https://www.slideshare.net/RupalTiwari1/fdi-26538521

5
C. (2015, July 23). 17 Big Advantages and Disadvantages of Foreign Direct Investment. Retrieved March 13, 2018, from
https://connectusfund.org/17-big-advantages-and-disadvantages-of-foreign-direct-investment
 Capital infusion takes place within a firm, and is the provision of funds to a relatively
unsuccessful division of profits of another division.6 There are two ways of capital infusion,
equity and debt routes. Under the equity route, the investor is given a percentage of shares in lieu
of capital investment through the issue of fresh shares. Under the debt route, a company may
issue debentures and may also choose to provide security, by encumbering its immoveable and
moveable property.7 Economic cooperation is vital to every country because a state should
always be open to the international relations in order to survive. A country cannot suffice all the
needs of its people so therefore, must relate to other states for support. In my opinion, the
Philippines should gain support from its neighboring countries such as, India, China, etc.

As citizens of the Philippines, the challenges that we face are building blocks to a higher
level of economic stability. Change is inevitable because it is the only permanent thing in this
world. This might be one of the greatest challenges that we continue to face. A change in
administration or authority takes a lot of time of getting used to. Globalization promotes
international cooperation among states which affect foreign investments because in order to gain
an investment in a foreign country, the states must have mutual intentions and purposes. In my
opinion, being at peace with most, if not all, the states, is a great place to be in because we will
not have any problems which regards to economic or political cooperation.

The first thing that I would recommend boils down to local administration. I believe that
if we improve our local investments and organizations, it will be a lot easier to control the ones
outside of our country. We should also be mindful of the limits of each company to avoid
overriding of roles in the society. With international relations, I believe that maintaining peace
and order with other states is a great practice of cooperation. With this in mind, the investments
would be a lot easier to manage.

6
Capital infusion. (n.d.). Retrieved March 13, 2018, from https://financial-dictionary.thefreedictionary.com/Capital infusion

7 Premnarayen, K. (2017, July 26). How Strategic Capital Infusion Can Benefit Companies. Retrieved March 13, 2018, from
https://www.entrepreneur.com/article/297779