Foreign Exchange Rate and the Impact of Foreign Direct Investment (FDI) in the Philippines

This paper reviews the literature on foreign exchange and foreign direct investment (FDI) in the Philippines. The objectives of the research are to provide an overview of the Philippine foreign exchange rate, analyze the impacts of FDI on the Philippine economy, and determine the opportunities and problems that arise from Philippine foreign exchange and FDI, as well as suggest policy recommendations to improve the country’s economic performance. The PRISMA methodology uses to identify and evaluate relevant studies. Results showed that several factors, such as economic indicators, political factors, and worldwide trends, influence the exchange rate in the Philippines. Additionally, foreign direct investment is crucial to the Philippine economy’s growth and development, with inflows making a significant contribution to economic growth and new employment created as a result. Challenges to the Philippine foreign exchange and FDI include its susceptibility to external shocks due to reliance on FDI inflows and the need for help managing foreign exchange reserves. However, there are opportunities, including technology transfer, job creation, regional trade and investment potential, and sovereign wealth fund development. The government should prioritize policies encouraging technology transfer and FDI to highvalue industries while implementing measures to control the volatility of FDI inflows. This paper concludes that foreign exchange and FDI can be used as tools for economic growth in the Philippines. Further research should be conducted to examine the long-term impacts of FDI inflows and the effectiveness of government policies in managing foreign exchange. This paper also highlights the importance of strengthening the Philippine economy through technological transfer and FDI and managing foreign exchange reserves. Finally, this research provides insights for policymakers to maximize the benefits of foreign exchange and FDI in the Philippines