Monday, October 21, 2019

Exports, FDI, Manufacturing, ICOR under Dutertenomics

A really good, wowie but short article -- only two paragraphs -- from my former teacher in UPSE, Dr. Emmanuel "Noel" de Dios here, "Four figures in search of commentary" published in BusinessWorld last October 14, 2019. His last sentence, "below are some figures that seem to express definite trends or turning points. But the meaning is left to the reader who might have a different interpretation. The titles, of course, are completely gratuitous."

The charts show that X/GDP, FDI/GDP, Manufacturing/GDP, are all declining especially under Dutertenomics. There is one rise, the incremental capital-output ratio (ICOR), and this is bad news actually. ICOR shows inefficiency of investments so the lower the ICOR, better.

I think the TRAIN2 bill, its name in 2017, renamed as TRABAHO bill in 2018, and now renamed as CITIRA bill in 2019, is part of the problem why FDI/GDP ratio under Dutertenomics reversed from continued upwards to big downwards under the present government. That bill has introduced another round of uncertainties to many multinationals especially located in PEZAs and other ecozones of other government agencies.

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