Coca-Cola and Foreign Direct Investment in the Philippines

While I lived in the Philippines, I followed what happened in the Philippines.  The national and presidential election in May, the political scandals, foreign policy with other Asian countries, and even the love life of Kris Aquino, the sister of the current president and the subject of at least one news story every single day.  And I realized that none of this ever really made it onto the international news circuit.  In fact, the only stories that are ever picked up by the international news are bad ones – the Maguindanao massacre, in which more than 50 people were killed, including two dozen journalists, the hostage crisis in Manila, when 8 tourists from Hong Kong were killed by a deranged former police officer.  And now that I am back in the U.S., the first story I read about from my adopted second home is this:

Even in the world of diplomacy, there are times when language has to be clear and unmistakable – like after a flag is mistakenly displayed in a way to imply there is a state of war.

The Philippine flag was displayed upside down behind President Benigno Aquino III when he met with President Obama and other leaders of the Assn. of Southeast Asian Nations on Friday.

“This was an honest mistake,” Rebecca Thompson, a spokeswoman for the U.S. Embassy, said in a statement posted on the Official Gazette, edited by the Philippine president’s office.

Shit!  Someone is definitely going to get the axe for that one.  It’s kind of funny, to be sure.  But there are certainly more substantive and interesting things going on in the country.  For example, Coca-Cola is going to invest $1 billion in expanding it’s market share in the Philippines:

“This investment is a proof point of our strong commitment to the Philippines, our confidence in the prospects of the Filipino economy and the continued growth of a broader and more affluent middle class in the Philippines,” said Glenn Jordan, president of Coca-Cola Pacific Group. The investment was announced during a visit of Philippines President Benigno Aquino Jr. to the United Nations General Assembly in New York.

Coca-Cola employs more than 7,800 people in 23 plants and 42 sales offices in the Philippines. It is currently building a bottling facility in Misamis Oriental that will be one of the largest plants in the region when it begins operations next year, the company said.

This seems strange to me, since Coca-Cola owns practically the entire market already.  But an investment like this from a private sector giant like Coca-Cola will have huge implications for the development of the country.  Foreign direct investment is a crucial component of economic growth, and a move like this signals increased confidence in the political and economic stability of the country.  It also shows that Coca-Cola has done its homework and feels confident that there are big opportunities brought on by a burgeoning middle class.  Also, the Philippines has one of the fastest-growing populations in the world and is set to cross the 100 million population threshold.  This means big dollars for Coca-cola, more jobs for the Philippines, and a better perception of the market among other companies thinking about moving in.  This is good news, but political aide at the UN who got a little too drunk the night before produced the top story coming out of the country.

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