: 10.56472/25835238/IRJEMS-V5I3P113
Ida Talia Arellano Hernandez. "Governing Foreign Capital: State Intervention and Sectoral Divergence in Indonesia and the Philippines, 2000-2019" International Research Journal of Economics and Management Studies, Vol. 5, No. 3, pp. 103-114, 2026. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V5I3P113
This study examines how state intervention shapes sectoral Foreign Direct Investment (FDI) inflows in Indonesia and the Philippines from 2000 to 2019. Although both countries actively seek foreign capital, Indonesia has secured larger and more diversified inflows, particularly in manufacturing, strategic infrastructure, and resource-based sectors. The Philippines, by contrast, has experienced more volatile, enclave-oriented FDI, concentrated in manufacturing and Information Technology–Business Process Management (IT-BPM) services. Drawing on a comparative analysis of constitutional foundations, national development plans, and key investment policies, the study argues that FDI inflows are shaped not by openness or restriction alone, but by the character of state intervention. Indonesia adopts a directive, strategic approach that channels investment into priority sectors and reserves smaller-scale activities for domestic actors, whereas the Philippines relies on a more regulatory, facilitative model centered on liberalized special economic zones and constitutionally embedded ownership constraints. While both countries restrict foreign participation in similar sectors, they do so through distinct policy logics. Divergent FDI inflows thus reflect not mere openness, but how states structure investment policies and embed foreign capital within broader development strategies.
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Foreign, Direct Investment, Investment Policy, Indonesia, Philippines, State Intervention, Sectoral FDI.