JAPANESE-FILIPINO JOINT VENTURES 31 participation in the Philippine economy. This is the justification for the present essay's concentration on Japanese-Filipino joint ventures. Philippine policy towards foreign investments shares some basic similarities with the policies of other Third World countries. In^tlij^jDjQst-WoricL War-XI years, the excitement over import-substitution industrialization provided the proper atmosphere for the massive entry of TNC subsidiaries into the host countries. The import-substitution strategy rode on the promise that local raw materials were going to be tapped and processed locally, that local labour was going to be extensively utilized, that the domestic market was going to be immensely benefited by the availability of cheaper locally produced commodities, and th^it the entire scheme wasgping to s^^ejthe_country^r^c^ foreign exchange. These expectations were quickly belied by the actual experience with this clever scheme. It is true that foreign exchange was not spent on the importation of manufactured goods, but great amounts went out of the country nonetheless to purchase the equipment needed to produce the import substitutes. Some local raw material was indeed processed into manufactured goods, but many other items could only be produced from industrial raw material that, again, had to be imported. Local capitalists found that they could not compete with the foreign subsidiaries whose brand names had long dominated the local colonially minded market. Thus, instead of using the import-substitution scheme as the occasion for launching a nationalind ustrialization programme,local capitalists found it immensely more profitable to blackm arket their dollar allocations. Interestingly, therefore^jmport-substitution industrialization_^r^)yedL_to bejaati onalist only in rhetoric, for its aHoptIonTby the newly independent states only Ijedjo^the further cntrenchcoenrt-of -foreign capital within their respective economies. Today^-we are witness to what appears to be an orchestrated shift jr5»n3^jj»pei"t-sub^liluli^^ export-oriented industrialization. Tedmocrats from both the dominant; and the subservient economies are now in unison in their condemnation of the evils of import-substitution. The new game is export-oriented industrialisation. Its abiding tools are the export-processing ^one and the joint-venture enterprises. It promises: (1) to effect the transfer of technology from the advanced to the backward economies; (2) to generate employment, which in turn would increase the competitiveness of labour and improve the purchasing capacity of the population; (3) to increase foreign exchange earnings, which in turn should restore a country's credit-worthiness in the international loan