The Socio-economic Impact of Korean Foreign Direct Investments on the Philippines

Abstract

The 21st century is dubbed as the Asian Century because scholars believe that the power and action is now in the Asian Hemisphere. The first Asian country that was able to uplift itself and reach the stature of an industrialized country is Japan followed closely by the Asian Tigers- Singapore, Taiwan, South Korean and Hongkong. This rise continued its development with Indonesia and Malaysia as the following countries and recently, China. These countries are believed to have adopted certain principles to be able to reach the status of a developed country; some of these principles are enumerated in the following. High involvement of the Government in the planning of the economy, adoption of Free-Market Economic principles; these are among others, the characteristics observed in the aforementioned countries. In line with the Free-Market Economic principles, it is also observed that the said countries opened a significant percentage of their economy for Foreign Investments; these investments are believed to have a significant positive effect on the host country. The positive effects brought about by Foreign Investments are believed to have contributed to a host country’s economic growth. In relation to the Philippines, the researcher endeavored to study if the case is the same in the Philippines in its acceptance of Foreign Investments in the form of Foreign Direct Investment. This research investigated, in particular, the impact of Korean Foreign Direct Investment on the Philippines. The Foreign Direct Investment Theory is used to explore certain socio-economic determinants in the relationship of KFDIs and the Philippines. In relation to this, it has been established that the contributions of KFDIs are generally positive and significant but should be of a supportive role to Filipino Investments.