FINAL REPORT: Mitigating Foreign Investment Risk in the Technology Sector
Executive Summary
As BRIC countries—Brazil, Russia, India, and China—become less favourable for investors, other developing countries grow in attractiveness. Many of these countries have stronger economic growth and a mix of the industries to provide long-term stability. The Philippines is one such country. It currently maintains strong GDP growth and a movement in the government toward reform and stability, both of which well-position the country for foreign investment. This report outlines the potential investment risks that corporations will face in the Philippines, and it provides a range of mitigation strategies to help minimize this risk and maximize return on investment. Each section of the report is broken into three components:
1) The nature of the risk;
2) An evaluation of the risk and its relationship with the technology industry; and,
3) Strategies to mitigate the risk and increase investment security.
The report consists of six sections, each of which impact technology firms investing in the Philippines.
1) Economic risks: Financing investment with a strongly-fluctuating peso, and operating within the ASEAN single market.
2) Legal and governance risks: Conducting business in a country with an unpredictable judiciary and a corrupt government.
3) Labour risks: Hiring and managing employees with uncertain labour regulations, high employee turnover, and frequent labour lawsuits.
4) Urbanization and transportation risks: Moving people and products with insufficient infrastructure, rising urban populations, and a lack of funding and resources.
5) Community risks: Controlling actors and issues such as an increasingly educated society, civil unrest, and natural disasters.
6) International risks: Addressing the influence of and relationships with ASEAN members, China, and the United States.
The Philippines will elect its next president in May 2016. Regardless of who is elected, the overall situation in the Philippines is expected to remain similar to how it is represented in this report. A democratic transition of presidential power, which has successfully occurred on fifteen previous occasions, should not impede investment outlooks for businesses in the Philippines. Contained within the report is a risk mitigation chart that summarizes the key sectors that the authors believe are essential for technology firms and investors to consider in the Philippines. Although the scope of the research is limited to the technology sector, we are certain that our analysis can also be applicable to other industries.
Please click on the following link to view the full report that is available for download in PDF format: Mitigating Foreign Investment Risk in the Philippines.pdf
