#MINDANAO
The much-talked-about midterm elections are over, but political realities still seem to dominate our social media news feed. Of course, the attendant circumstances and political events from January to May 2025 and the election results influenced by these are worth noting, coming as they are without much precedent. Nonetheless, while they are important things needing our attention, other realities of equal importance affect our individual and collective well-being.
The economy, its growth, and how it affects each of us are important. The economy is the space in society where trade, commerce, and livelihoods exist. While textbook definitions teach that it is about allocating scarce resources, the economy is a means to enable people to make their living and thrive in the world. We strive to be a more developed economy so that more participants -producers, traders, and consumers- create more opportunities for our people and our children.
These participants in an economy, their collective production of goods and services grows the economy, measured in terms such as the Gross Domestic Product (GDP) of a country, or the Gross Regional Domestic Product or GRDP in the case of an administrative region of the Philippines.
How fast this economy grows yearly becomes the economic growth rate, which is measured in GDP or GRDP Growth rate for a given year, expressed in a percentage. Using this metric, some can grow faster than other countries, even if their GDP is way bigger than ours. To know how individuals are faring within an economy, the GDP per capita of a country is derived. Some countries may have a smaller overall GDP than ours, but since their population is smaller, their GDP per capita may be higher.
While comparing our rates of growth with that of other countries seems to occupy many minds, it is finding ways for us to raise these figures that, to me, are more important.
To grow the economy, investments therefore matter to an economy. These can be foreign investors bringing capital in, or local investors reinvesting earnings into an expansion of business activities. The more investors enter, the more participants work in an economy, enlarging it through their productive activities, creating opportunities for people, who, when they consume or produce on their own, add to the GDP.
How well a country or economy attracts investments will bode well or ill for its economic future. What policies adopted by their governments attract or deter the entry of foreign investment, or the reinvestment of local businesses. This is the question.
In my experience, investors, both foreign and local, generally look at a location for investment in terms of opportunity for their business to grow and expand into the future. They already factor in the political realities of a certain country when an investment decision is made.
What would matter, therefore, are the income prospects over a certain period within which sustained earnings can be realized. This is because the long-term goal of serious businesses is to increase the value of a company’s stock for its shareholders. This means larger investors look at a certain number of years as the horizon within which to ensure the profitability of a business. It takes patience and an attitude of perseverance to constantly recalibrate marketing and sales plans, and a periodic review of expenses for most businesses to turn revenue into profit.
What would worry an investor, whether local or foreign, is whether the current regime of regulations and benefits enjoyed would abruptly change. The adjustments needed to address such quick changes cost money, which would otherwise be spent expanding. Uncertainty, therefore, is an investor’s adversary. We should find ways to reduce uncertainties for businesses to thrive, and the economy to keep growing.