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In effect investors may face financial losses and for a business it would complicate its pursuit of earnings thereby reducing the desirability of that investment.
As mentioned in the article, multinational companies are the ones making efforts to manage political risk since they know foreign environments add risk and complexity to their business performance. I myself believe that investing in developing countries like the Philippines is a political risk. If we try to look how disorganized our government system is -- there is endemic corruption, incompetent political leaders, approval rating of our president is already negative and our legislative body has its own delaying tactics...
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