I WANT to thank you very warmly for this opportunity to highlight again some of the main features of our government policies relating to the interests of the foreign business community in the Philippines. I have always been consistent about my vision for uplifting our economy. I outlined that vision from the very first day of my administration. While at EDSA, I said, that our challenge must be that within this decade, we must win the fight against poverty.
I reinforced that vision in my first State of the Nation Address where I highlighted four elements as priority in the fight against poverty.
First, an economic philosophy of free enterprise appropriate to the 21st century.
Second, a modernized agricultural sector founded on social equity.
Third, a social bias towards the disadvantage to balance our economic development plan, and;
Fourth, to raise the standard of morality in government and society.
In my last State of the Nation Address, I acknowledged that the fast and economic development of social reforms which are needed to win the battle against poverty are the result of good policies and empowered institutions that are the features of a strong Republic.
A strong Republic should have the capacity, represented through strong institutions and a strong democracy, to execute good policies and deliver essential services.
In that last State of the Nation Address, I focused on the need to execute the good policy of fighting corruption and to deliver the essential service of peace and order.
Fighting corruption is an essential part of the broader policy that we know as good governance. I believe that the primordial requirement in building a strong Republic is good governance and fighting corruption starting with setting the example at the top.
Thus, even my husband is not above the law. Though I consider intrigues against him as simply an occupational hazard, I’ve encouraged him to face Senate investigation to demonstrate that there are no sacred cows in my administration. And by letting the investigations go wherever any evidence might take them, I thank God that the evidence has invariably shown that the accusations against him are false and politically motivated. But because my husband has humbled himself by submitting to Senate investigations, I have enhanced my moral authority to investigate any serious allegation and uphold anyone accountable if corruption is found to take place.
Let me assure you that I am working diligently to ensure that you get the professional and clean government you deserve.
For instance, our new e-procurement program is saving billions and many.... anomalies. My presidential anti-graft commission is investigating a number of high government officials including cabinet members, bureau directors, government board chairmen, state prosecutors, board members of corporations. And for many of them where the case is very high profile or the evidence is very strong, the perception is very strong, I have asked many of them to go on leave pending the results of the investigations.
As for corruption within the court where there is separation of powers in our constitution, because of your feedback, specifically feedback of the American Chamber, we are pro-active in prosecuting graft among state prosecutors. And with the cooperation of the Supreme Court for prosecuting erring judges as well, some of these State Prosecutors and Bureau Directors will very shortly, get their walking papers because the due process is winding up. And that is without prejudice to the criminal cases filed against them.
Last year, I declared the Bureau of Customs and the Bureau of Internal Revenue showcases in the fight against graft and corruption. This is a continuing effort. It is an effort where I have enlisted the support of the business community. And I ask you to join the Filipino businessmen who are helping institutionally in this effort.
This brings me to one of your concerns about how we can improve the interphase between business and government. One of the things that the government has an obligation to ensure is that its dealings with business are efficient, clear and transparent. And this is particularly true in the key areas of taxation, customs, immigration and labor relations.
Much, a lot, of interface between you and the government are in these areas; and it’s here that the foreign business community is entitled to expect and to receive the highest level of good governance.
My government, therefore, is enhancing its focus on improving the structures and governance practices of these agencies. In terms of improving your interface, while we have a one- stop shop for new investors, we don’t have one existing right now for existing investors. And we’ll create one shortly that will include these four agencies and we will place the quick response team of the Department of Trade and Industry under this office.
I understand that another concern of yours is the sanctity of contract. We are all accountable. You are accountable. You are stockholders. I’m accountable to my 80 million shareholders. So I consider it my duty to look after their interest. We respect the sanctity of contract even as we are aggressive in correcting what we see is illegal or grossly onerous.
This is not simply a case of contractors versus the government. In many cases, they may even favor the investors. And I’d like to say that I have heard from the investors, those who have had to go through the review of the ICT contract say that they are satisfied with the transparency and the professionalism with which these contracts have been reviewed and renegotiated. But the best defense, of course, is to prevent a situation from arising where we have to renegotiate in the future. Because we don’t want a day to come when the contracts will further have to be reviewed and subject to adjudication. Many of the contracts that we have had to review now are contracts that are not the making of my administration. And if they are all so legal and no onerous provisions were there, yes, go and they go. But there are a few where, indeed, even the shareholders admit, that shortcuts were being taken. I don’t want to spend the rest of my retirement facing the Ombudsman for that. It is important that we have the sanctity of contract. But it is important that those contracts be in line with the law from the very beginning.
While each contract is unique, there are many common elements and precedents all over the world. And in the process, all these renegotiations specifically in the Department of Energy, as I said, the feedback so far has been very good, we’re compiling best practices of such contracts to give us a resource to draw on in the writing of contracts and serve as benchmarks should there be a legal challenge in the future.
The challenge to deliver the essential service of peace and order.... in the fight against terrorism. This is a global fight, and not the challenge of a single nation or region. The tragedy in Bali once again shows that terrorism knows no bounds.
One of the many challenges that have come up out of the tragic events of September 11, the Bali bombings and the bombing in the other parts of Asia is the impact it has had on the economy of the world. Of course, the human toll is immensely saddening. And immensely worse that the economic toll is widespread. It comes at a time when there are fears that the global economy may be in for a double dip. My greatest concern is, how the terrorist have shifted the agenda of politic and cooperation from one of economic development to an overwhelming concern about security. Witness the unfortunate decision of some of your governments to issue travel advisory or institute selective procedures for granting.... visas applicable to 25 countries including the Philippines.
I knew the moment last year when I committed the Philippines to a leadership position in Asia in the global war on terrorism, that I would be subjecting our nation to heightened degree of attention on this issue. But I also knew that we had to share with the international community, in the interest of transparency our experience including our challenges and our successes in dealing with terrorism if this effort was to be a true coalition with you.
But I don’t think that we should be penalized by those who are well aware of the tough decisions and actions we have taken to not only deal with terrorists in our own shores, but also to ensure countries in our region and around the world cooperate by sharing intelligence and by assisting and apprehending terrorists who are not restricted by national borders. As important, a knowledgeable citizen of the country where you come from, especially those from Europe, you have an important role in ensuring that the close relations between our country and our people should not be a victim of terrorism. You know that because of our aggressive drive against terrorism, despite the desperate resort to hit and run bombings, the domestic terrorists particularly the Abu Sayyaf are on the run. We have captured the Zamboanga and Quezon City bombers including their mastermind, the head of the explosive unit of the Abu Sayyaf who was presented yesterday.
There is much that you can do to help us. You are important stakeholders in my country. And I hope that you can help bring to your country and your officials a true picture of the Filipino traveller. I believe that the strongest argument we have against such penalty is the reputation of the Filipino workers and seamen in Europe.
I take great exception with the premise of gloom and doom and drift that my critics have engendered. I inherited an economy heading for bankruptcy and a political environment nearing on chaos but I have instilled political order and fiscal discipline.
Just a few months ago, there was a survey that came out that 19 percent of the people want to leave the country. Well, prior to that, there were more people who wanted to leave the country. In other words, those statistics showed a figure on the decline, but that was not how my critics were able to present it, and as for the deficit issue, while we recognize that we must address it, I believe it has been overblown because of the preoccupation to the absolute target rather than the more meaningful debt to GDP ratio which is used as the rating standard. To despite the slippage. The deficit to GDP ratio maybe only point five to one percent higher than programmed, placing the 2002 deficit broadly in line with the 2001 deficit. This ratio compares favorably with the rest of Asia. And speaking of the rest of Asia, our economic growth, our export growth, our tourism growth, they compare very favorably with the rest of Asia.
Inflation and interest rates are at the lowest point in more than a decade. Our investments, the needed infrastructure, are underway. And most importantly, I have managed to pass through Congress significantly four measures that have been.... for administration after administration, including the power sector reform law, the anti-money laundering law, among others. But my effort to maintain support for the reforms we have undertaken is made even more difficult that many countries do not play by the rules.
Some developed countries preach free trade and yet, practice protectionism against the developing countries. Because of the protectionism, they continue to be practiced by many developing countries. And because of the still uncertain global environment, the focus of my attention for the six months is really mostly on building up domestic demand, thus, may I share with you briefly the points of the eight things that I want to do over the next six months.
The first program item is to promote the growth of the small and medium enterprise which are the most effective, efficient leaders of capital.
The second is to jumpstart housing that has the biggest multiplier. The other night I had dinner with Senator Manny Villar who, before he entered congress, was a housing magnate. He’s building again, and others like him, are building again. They are not just planning to build. They are building. That’s why the National Statistics Office figure show a 20 to 25 percent increase in construction.
The third program item is to reduce transport cost from Mindanao to Luzon through a P30 billion roll on, roll off port and ferry system from Mindanao through the Visayan Islands to Luzon to be funded by the Development Bank of the Philippines lending to credit worthy investors as I hope some of you will be in this very important logistics program.
The fourth is infrastructure to decongest Metro Manila, focusing on starting the north rail between Metro Manila north to Clark, and the continuation of the south toll road all the way to Batangas Port. Also, the start of the MRT final linkage with LRT so that we can have a loop around the Metropolis. And the review of Metro Manila’s infrastructure program to ensure that it makes sense and produce visible results swiftly.
The fifth is to mobilize the contribution of the PCGG to the fiscal resources of the government, particularly the $600 million Marcos deposit with the PNB and the coco levy remaining 27 percent share of San Miguel.
The sixth is to make Makati a specific urban tourist destination with its compact easy to secure location, worldclass mall entertainment facilities and internationally considered cheap shopping, perhaps with a side trip to Boracay or a similar resort as part of the package.
The seventh is to stimulate private investment in agriculture by pursuing legislation to enable banks to accept agricultural land as collateral.
And the eighth is to begin the complete staff work to make the reclamation area in Roxas Boulevard a tourism complex to be called the Bagong Nayong Pilipino Tourism Estate.
The program I have just outlined represents a significant part of my Medium-Term Philippine Development Plan and my continuing agenda of reform and change. We have been an active reformist government. I would be the last person to pretend that we’re always 100 percent right. But we have a strong record to look to, and we offer it at a time of intense international uncertainty and concern. We offer a capacity as well, a record of stability, of predictability and of knowing what we believe in and what we stand for.
The end result that we are moving towards not.... today and tomorrow is there, but something we’re moving towards is that we have a stronger, more respected, more resilient Philippine nation. However, in moving towards a strong Republic, when you are starting from what many have considered for a long time as a soft state. You often have to wait a while before you get the dividend of economic reform. And you can get this if you are willing to undertake the major reforms and face down some of the short term political challenges.
We have done things nobody was able to do for many years. Repair the damage done to the presidency. Worked hard to deliver a stable economy. And as many of you have seen when you followed APEC, lifted our country’s reputation around the world. And I am glad that you have said, Mr. Daly, that your expectations continue to remain high. Because let me remind you, I have been in... office 21 months. It takes three years to construct your factory from the time you conceptualized it. When I say I am moving towards a strong Republic, don’t expect that it should be there the next day. And before you get there, you go through all of these economic and political difficulties. I am going, I am willing to go through them. But I ask you, the members of the international business community, as you’re already here, let us share this vision together, stay with me, we will yet make a strong Philippine Republic together.
Thank you.