Foreign Direct Investment and Manufacturing Performance in the Philippines: Evidence from WDI, 2000–2024

This study develops a replicable business analytics evidence base on the relationship between inward foreign direct investment (FDI) and manufacturing performance in the Philippines using annual World Development Indicators (WDI) data for 2000–2024. Manufacturing performance is evaluated along two complementary dimensions: (i) manufacturing value added growth as a short-run performance indicator and (ii) manufacturing value added as a share of GDP as a structural transformation indicator. The analytic strategy applies parsimonious dynamic time-series models in which manufacturing outcomes are regressed on lagged inward FDI intensity (net inflows as a percentage of GDP), while conditioning on inflation and the development path (GDP per capita) and isolating the discrete COVID-19 disruption. Statistical inference is conducted using heteroskedasticity-and-autocorrelation-consistent (HAC/Newey–West) standard errors to support audit-ready decision interpretation. Results indicate that lagged inward FDI intensity is not statistically associated with either manufacturing growth or manufacturing share once macro dynamics and major shocks are controlled. Manufacturing outcomes are instead dominated by persistence in time-series behavior and sensitivity to economy-wide disruptions, particularly during the pandemic period. Robustness checks using alternative FDI operationalizations and pandemic sensitivity re-estimation yield consistent conclusions. From a health-and-business analytics perspective, the findings imply that aggregate FDI inflow intensity has limited decision value as a standalone indicator for manufacturing performance monitoring, motivating a shift toward analytics frameworks that incorporate investment composition, sectoral allocation, and linkage/absorptive-capacity indicators relevant to supply-chain resilience and system stability.