ABSTRACT
Foreign direct investment (FDI) can be influenced by government policies concerning taxation, trade, the foreign exchange rate and access to foreign exchange, the legal system, industry regulation and state ownership, and macroeconomic policies. Other factors include the size and growth rate of the domestic market, the level of wage rates, the availability of workers at different skill levels, the natural resource base, infrastructure development, and so on. The number, range, and complexity of the factors that influence FDI have several implications for governments in their analysis of ways to modify and improve their general and sectoral restrictions. Most importantly, the effectiveness of FDIs restrictions are country and time dependent. The first laws restricting FDI were the Philippine Investment Incentives Act of 1968 and the Foreign Business Regulation Act of 1969. The Foreign Business Regulation Act mandated that, in a wide range of industries, only companies classified as Filipino-owned could invest.
