The role of foreign direct investment and public-private partnership in economic growth: Philippines, 1991-2020
Date
2023-01-19
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Abstract
The role of foreign direct investment (FDI) and public-private partnership
(PPP) projects in economic growth has been a topic of discussion for some time now.
However, the conclusions from empirical studies tend to vary, including those in the
Philippines. Using data from the World Development Indicators database of the
World Bank, the Philippine Statistics Authority (PSA), and the Public-Private
Partnership Center (PPPC) of the Philippines, this study employs descriptive and
econometric analysis to estimate the impact of FDI inflows and PPP projects on the
economic growth of the Philippines over the period 1991–2020, along with the usual
components of GDP, i.e., consumption spending, investment, and government
expenditure. The evidence shows that FDI and PPP infrastructure projects have a
positive impact on economic growth, but only PPP infrastructure projects produce
significant results. Unfortunately, the COVID-19 pandemic posed a major constraint
on FDI and PPP projects. Nevertheless, it is hoped that the results of this study will
lead to policy implications that would promote FDI and PPP projects for faster
economic growth and inclusive development.
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Keywords
foreign direct investment, public-private partnership, economic growth, GDP