The Relationship Between Economic Growth and Foreign Direct Investment in the Philippine Economy

Abstract

Foreign Direct Investments (FDI) serves as a financial provider to some countries who experience sluggish economy. Through this investment, it promotes stable, long-term interests, and generates a direct inflow from other countries and direct inflow of the capital in the economic system of a certain country. In this research, it demonstrates the indicators of how economic growth could attract foreign direct investment to boost its development in a certain country, mainly in the Philippines. It is important to identify how FDI would sustain the economic development despite of the ups and downs that have experienced in the Philippines. This research study used Inferential Statistics Method wherein it allows one to describe data and interpret as well as formulate conclusions out from appropriate data. The findings showed that only one variable have significant effect on Foreign Direct Investments. Stock market is highly significant impact by FDI, as shown by their p-values below the 5% level of significance. This research study conclude that Economic Growth has a significant relationship to Foreign Direct Investment (FDI). This means that 1 unit of GDP will increase FDI to 0.08%. When PSE Index increase by1 unit, Foreign Direct Investment decreases by -413 units.