Speech delivered by President Benigno Aquino III at Euromoney’s Philippine Investment Forum, held on March 27, 2012 at the Manila Peninsula, Makati City.
Once upon a time, the consensus among you was that we were the sick man of Asia. The diagnosis for this illness was as simple as it seemed insurmountable: a lack of political will; an entrenched system of corruption that could not be weeded out; and a feeling of utter impossibility among Filipinos and their leaders alike.
Since I am addressing you at a time when Filipinos are gearing up for Holy Week, I hope you permit me to state in a biblical vein: all it took was faith-healing to invoke, in political terms, the biblical injunction from the Gospel of Luke chapter 4 verse 23: “Physician, Heal Thyself.”
Let no one doubt that we are doing the three things which were previously thought of as impossible: we are calling people to account; we are putting closure to the controversies that had sapped our institutions of their vigor and had diminished their legitimacy in the eyes of our countrymen; in other words, we are exercising political will. We have reformed the manner in which we allocate and dispense public funds; we have thrown the book at the thieves; and we are collecting what the government is due. That is how we are fighting corruption, and making a mark. We have fought the culture of naysaying and negativity, and have given a sense of empowerment to our people, replacing the hopelessness of the past with a steadfast commitment to building a society that works. We have put an end to business as usual and proclaimed a country open for real business
And this, simply, has done wonders for our economy. Two years ago, for example, none of us could imagine the Philippine Stock Exchange index breaking the 4,000 barrier. Now, we have breached not just 4,000, but 5,000 as well. The PSEi closed at another record high just eleven days ago at 5,145.89 points. For those of you keeping score: that’s 21 record highs in the 21 months of our administration.
In our relatively short time in office, a significant number of respected international organizations have also given us thumbs up signs. The World Economic Forum, for one, bumped the Philippines ten places up—from 85th to 75th—in their latest Competitiveness Index. The Japan External Trade Organization, after conducting a survey among companies in our region, named us the best place to do business in Asia-Oceania, whether in manufacturing or service. HSBC even recently predicted that, by the year 2050, we will be the sixteenth largest economy in the world. And these are only a few of the companies and organizations that have already changed their mind about the Philippines—and have been very vocal about it.
This renewed confidence from the global community has reflected itself in real pesos and centavos invested in the country. Since we took office in July of 2010, we have seen 449.7 billion pesos in investments in the Philippine Economic Zone Authority. This accounts for 22 percent of all investments in PEZA since it was established in 1995—seventeen years ago. Likewise, in 2011, investment promotion agency-approved foreign direct investments grew by 30.6 percent to 256.1 billion pesos—the highest recorded level in sixteen years.
We are also performing quite well in the bond market. In January of this year, we issued 1.5 billion dollars in global bonds with a coupon rate of five percent—the lowest for an Asian sovereign for that tenor, and at better rates than several other investment grade sovereigns like Indonesia, Mexico, Brazil, and even some EU countries like Spain.
Might I add: all this is happening amidst global economic uncertainty. If these facts and figures tell us anything, it is that the Philippines’ success has been nothing less than heroic—that we have experienced high after high in our investment story.
So many people in government continue to work endless nights to make certain that we build on our momentum—that we continue along this path to progress.
Suffice to say: we are proud of the progress we have made, but we are not satisfied with just this. We Filipinos know just how much potential this country has; and we are working even longer nights to fulfill this potential.
So what’s next for the Philippines? The plan for this year involves focusing on three specific sectors—sectors that will have the largest impact on our economy, and in the lives of our people—that will create much-needed jobs in the timeliest manner, namely: agriculture, infrastructure, and tourism.
I have always maintained that our farmers should be given enough incentive to do their jobs well. Right now, while our farmers account for 33 percent of total employment, they only account for 13 percent of GDP. This isn’t right; and our administration fully intends to increase farmer productivity and help facilitate the trade of produce.
We have increased the budget of the Department of Agriculture by more than fifty percent to 53.3 billion pesos. The bulk of this money will go to more irrigation projects, more farm-to-market roads, and more buying posts—projects that will directly impact the lives of those who find their livelihoods in agriculture, and will move us closer to our goal of reaching rice self-sufficiency in 2013, which we believe extremely doable.
Our infrastructure programs have been getting a move on as well. As of the 15th of March, I am told that the Department of Public Works and Highways has bidded out nearly ninety percent of their 2,128 projects worth 63 billion pesos this year. 91% percent of these projects have already been issued notices to proceed; and we are confident that, very soon, we will reach 100 percent.
I am also happy to report that last week, that our administration has approved 133 billion pesos worth of projects for different sectors. Most prominent among them is the LRT Line 1 South Extension Project, worth 61.53 billion pesos. The plan is to extend LRT Line 1 by almost twelve kilometers, from Baclaran, through Paranaque and Las Pinas, to Bacoor, Cavite. I have full faith that Transportation and Communication Secretary Mar Roxas will have this extension operational at the soonest possible time. That, in a little while, we will be able to expand transportation, and open the gates a little wider between Metro Manila’s and Cavite’s economies.
Tourism is another industry that has made leaps and bounds. I’ve always said that tourism is a low-lying fruit for the Philippine economy that has long gone unpicked. But thanks to a re-energized Department of Tourism care of Secretary Mon Jimenez—and thanks to an excellent marketing campaign, coupled with a liberalized aviation industry—in January alone, the Philippines welcomed more than 400,000 visitors. This is the highest monthly visitor count in our history. And if we can sustain this, we are set to welcome almost 4.8 million visitors this year. This is really close to five million. We are still quite a way from our target of 10 million yearly visitors by 2016, but imagine: two years ago we were expecting just around three million visitors a year; and now there is the possibility of welcoming five million. We still have four years and three months left to reach our target—and we know that, each year, we can grow our number of visitors closer and closer to our goal.
From the beginning, the secret to our success has been simple: we want to make it easier for people to do business here; and that means creating a level playing field, curbing corruption, and eliminating inefficiencies. This explains many of our initiatives, particularly the Philippine Business Registry. Instead of our entrepreneurs running around from agency to agency just so they can set up shop here, we have given them a one-stop-shop, where they can transact with multiple government agencies at once. This reduces the time it takes to register a business from several days to just twenty to thirty minutes. More than that, it vastly reduces opportunities for corruption.
The bottom line here is: if we want businesses to set up shop here and create jobs for our people, we have to be competitive. We have to focus on industries where there are actual opportunities for mutual benefit. The world is getting increasingly smaller, and we find ourselves pitted against countries who have very competitive business propositions. We cannot compromise our position by making life more difficult for companies because of corruption or red tape. We cannot sacrifice the jobs created by these businesses, because it is our people who will take the brunt of the hit if these businesses choose to operate elsewhere. We need to continue fostering a good environment for business—one that is both stable and predictable. I assure everyone here today: this belief will always be a core principle of our administration; and I invite all of you to ride this wave of optimism early, and invest in our country, be it in agriculture, infrastructure, tourism, or any other sector. We are eager to work with all of you.
Investors have always been a significant component of our vision for this country. But perhaps we go by a more expansive definition of the word investor. While we value the confidence of potential investors; and while we value the businesses that have chosen to set up shop here; above all, we value those who have invested their lives, their work, and their families in this country—the Filipino people.
As their government, the people are our ultimate shareholders. And we are bound to work in their interest. This is the driving principle behind all our efforts to be competitive. At the end of the day, we want our economy’s growth to redound to better lives for people. We want to leave no one behind on the straight and narrow path to progress, because we know that the success of our story—of the Philippines’ story—is dependent on the success of each and every one of the characters who play a part in it: from the farmer who gets up before sunrise every day, to the men and women who clock into work at 9AM, to you, the investors who have placed your bets on the Philippines.
Thank you and good morning. May you have a productive forum.