PGMA's Speech during the Awarding Ceremonies of the 2002 Philippine Quality Awards

Heroes Hall, Malacanang (06 Dec 2002)

OUR OTHER CABINET MEMBERS WHO ARE HERE TODAY, NANDITO SI SECRETARY CANLAS; NANDITO SI CHAIRMAN NG NFA, LITO SARMIENTO NA SIYANG TATAY NG QUALITY AWARDS DI BA LITO? DR. GONZALEZ OF D.A.P.; AND I WOULD LIKE TO GREET THE MEMBERS OF THE BOARD OF JUDGES, SI MIKE VARELA, SALAMAT SA IYONG PAG-CLARIFY DOON SA ATING ... SINABI N'YANG, SINABI MO TUNGKOL SA PIATCO, THANK YOU VERY MUCH; DR. VELASCO; MR. AQUINO; FRANCIS FERRER, NANDITO SI FRANCIS? HI FRANCIS, ONE OF OUR ELECTRONICS GIANTS AND LEADERS, AND PIONEERS; REY PALMARIO AND THE MEMBERS OF THE COMMITTEE, JUN BERBA, CYNTHIA CABASAG, JUN ORTIZ-LUIS, NANDITO BA SIYA? HELLO JUN! JOHNNY QUINTOS, CEDRIC BAGTAS. NASAAN SI CEDRIC? THANK YOU AGAIN FOR THE BIG SUPPORT OF THE LABOR MOVEMENT TO OUR ECONOMIC RECOVERY BY SAYING THAT DURING THIS DIFFICULT TIMES HE WILL SUSPEND DEMANDS FOR WAGE INCREASES. THANK YOU VERY MUCH. DR. CONSUELO FLORA, THE AWARDEES, OTHER GUESTS, LADIES AND GENTLEMEN, GOOD MORNING:

FIRST OF ALL, LET ME CONGRATULATE THE WINNERS OF THIS YEAR'S PHILIPPINE QUALITY AWARDS. I'M PROUD OF THESE AWARDS, I LEARNED ABOUT THEM BECAUSE AS UNDERSECRETARY CRISTOBAL SAID, THEY HAVE BEEN AROUND FOR FIVE YEARS. I LEARNED ABOUT THEM FROM LITO SARMIENTO WHO WOULD OFTEN INVITE ME TO THE AWARDS CEREMONY WHEN I WAS STILL SENATOR AND VICE PRESIDENT. AND I AM VERY HAPPY THAT AFTER THESE WERE BEING GIVEN AS PRIVATE SECTOR INITIATIVE, LAST YEAR THEY WERE INSTITUTIONALIZED IN REPUBLIC ACT 9013, ONE OF THE FIRST BILLS I SIGNED INTO LAW AS PRESIDENT.

AND IT'S TIMELY THAT WE ARE HANDING OUT QUALITY AWARDS TODAY, THE DAY AFTER MY ARRIVAL FROM MY STATE VISIT TO JAPAN, AN ECONOMY THAT IS KNOWN TO BE A STRICTER FOR QUALITY.

LET ME SHARE THEREFORE A LITTLE REPORT ABOUT SOME OF THE THINGS THAT WE DID IN JAPAN ESPECIALLY RELATED TO QUALITY.

I WENT TO JAPAN FOR A STATE VISIT UPON THE INVITATION OF THE EMPEROR HIS MAJESTY, FOR THE SAME REASON THAT I WAS IN CAMBODIA AT THE ASEAN LEADERS' MEETING A MONTH AGO, TO FOCUS ON THE ECONOMY AND SECURITY OF THE PHILIPPINES. IN THIS INTERCONNECTED WORLD, OPENING A DOOR IN THE KEIDANREN COMMUNITY CAN OPEN AN OPPORTUNITY FOR JOB CREATION IN THE PHILIPPINES

WHETHER IT'S THE FIGHT AGAINST GLOBAL TERRORISM OR IMPROVING OFFICIAL DEVELOPMENT ASSISTANCE, AT THE END OF THE DAY, IT 'S ALWAYS ABOUT THE ECONOMY AND IMPROVING THE LIVES OF OUR PHILIPPINE CITIZENS. REMEMBER THAT WHEN I BECAME PRESIDENT, I INHERITED THE COUNTRY WITH 40 PERCENT OF THE POPULATION LIVING BELOW THE POVERTY LINE AND 4 MILLION FILIPINOS OUT-OF-WORK. AND THIS IS A CONTINUING CHALLENGE THAT WE HAVE TO ADDRESS.

AND SO, WE GO WITH YOU, THE FILIPINO BUSINESSMEN TO ENCOURAGE YOU TO CREATE JOBS. AND WE ALSO GO TO OTHER COUNTRIES TO ENCOURAGE THEIR BUSINESSMEN TO COME AND CREATE JOBS IN THE PHILIPPINES.

JAPAN IS THE ACKNOWLEDGED LEADER IN THE FIELD OF ADVANCED TECHNOLOGY, WHICH IS A KEY TO QUALITY. JAPAN'S LEADERSHIP IN ADVANCED TECHNOLOGY IS ONE OF THE FACTORS THAT WILL INFLUENCE THE SHAPE OF THE ECONOMIC PARTNERSHIP AGREEMENT THAT THE PHILIPPINES AND JAPAN ARE NEGOTIATING. LET ME TAKE THIS OPPORTUNITY TO EXPLAIN MY IDEA ABOUT THIS PROPOSED ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE PHILIPPINES AND JAPAN.

IN MY VIEW, AN IDEAL FOR AN ECONOMIC PARTNERSHIP AGREEMENT IS TO MAXIMIZE THE AREAS OF COMPLEMENTARITY BETWEEN TWO ECONOMIES. FOR INSTANCE, WHILE JAPAN IS THE ACKNOWLEDGED LEADER IN THE REGION IN THE FIELD OF ADVANCED TECHNOLOGY, INCLUDING ICT, AND CAPITAL- INTENSIVE INDUSTRY, THE PHILIPPINES IS WELL-ACKNOWLEDGED INTERNATIONALLY FOR ITS TOP-QUALITY KNOWLEDGE WORKERS. WE CAN DEVISE THE RIGHT ARRANGEMENTS TO TAKE FULLER ADVANTAGE OF THIS COMPLEMENTARITY.

TO ILLUSTRATE, WHILE I WAS IN JAPAN I OPENED THE FIRST E-SERVICES PHILIPPINES EXHIBITION TO SHOWCASE OUR UNIQUE OUT-SOURCING CAPABILITIES, WHICH GARTNER RESEARCH CALLS THE "BEST KEPT SECRET". YES, IT IS A WELL KEPT SECRET BECAUSE WE NEED TO ADVERTISE IT MORE.

THERE ARE MANY I.T. COMPANIES IN THE UNITED STATES WHO GONE ON AN EXPLORATORY MISSION. THEY WOULD HAVE BECAUSE THE U.S., IF THEIR, SOMETIMES THEY ARE FIRST, IF THEY GO TO EUROPE, THEY WOULD GO TO IRELAND, THEY WOULD GO INDIA, THEY WOULD GO TO THE PHILIPPINES. OTHER TIMES, THEY TAKE THE PACIFIC ROUTE, AND THEY WOULD GO TO THE PHILIPPINES, OTHER COUNTRIES IN SOUTHEAST ASIA, THEY WOULD GO TO INDIA, THEY WOULD GO TO IRELAND BEFORE THEY GO BACK TO THE UNITED STATES. A NUMBER OF THE I.T. COMPANIES HAVE TOLD ME THAT FOR THOSE-- WHERE THE FIRST STOP WAS PHILIPPINES. THEY DID NOT PROCEED ANYMORE TO THEIR OTHER STOPS BECAUSE THEY FOUND THAT HERE IS WHERE THEY WANT TO DO THEIR I.T.

AND THE EXHIBITION DEMONSTRATED IN JAPAN THAT THOUGH JAPAN IS THE REGION'S LEADER IN ADVANCED TECHNOLOGY, IN THE AREA OF I.T. AND I.T.-ENABLED SERVICES, THERE IS A GROWING NUMBER OF JAPANESE INVESTMENTS AND OUT-SOURCING INITIATIVES IN THE PHILIPPINES. THIS IS ESPECIALLY TRUE IN THE FIELDS OF ENGINEERING DESIGN, SOFTWARE DEVELOPMENT, DIGITAL ANIMATION AND BACKROOM OPERATIONS. THESE WERE THE ITEMS IN THE EXHIBIT, THE I.T. EXHIBIT IN JAPAN, THE E-PHILIPPINE EXHIBIT IN JAPAN. AND IN THE SEMINAR THAT OPEN THE EXHIBIT WHERE I SPOKE, THE CROWD OF JAPANESE PARTICIPANTS WAS OVERFLOWING. THERE WERE 200 JAPANESE FIRMS WHO PARTICIPATED MUCH, MUCH MORE THAN ANTICIPATED. SO, IT WAS STANDING ROOM AND IN ORDER TO ACCOMMODATE THE JAPANESE WHO WERE PARTICIPATING, THE FILIPINO DELEGATION EVEN VOLUNTEERED TO GIVE UP THEIR SEATS AND THEY WENT TO THE HALL OUTSIDE AND WAITED FOR US TO FINISH THE SEMINAR SO

THAT THE JAPANESE WHO WERE PARTICIPATING COULD LISTEN TO WHAT WE HAD TO SAY ABOUT THE PHILIPPINE I.T. INDUSTRY.

AND WHILE I DON'T HAVE THE FINAL RESULTS OF THE REACTION OF THE 200 PARTICIPANTS, LET ME JUST GIVE AN INDICATION OF THE PERCENTAGES THAT WE MIGHT BE EXPECTING FROM THE FIRST JETHROW INVESTMENT MISSION TO COME TO THE PHILIPPINES AFTER I BECAME PRESIDENT IN MARCH 2001. AT THAT TIME JETHROW BROUGHT 25 I.T. RELATED FIRMS. AND AT THE 25 I.T. RELATED FIRMS, THREE PUT UP THEIR I.T. BUSINESSES HERE AND EIGHTH, AN ADDITIONAL EIGHT FROM THAT GROUP ARE PUTTING UP -- IN THE PROCESS OF PUTTING UP THEIR FIRMS. SO, THAT'S 11 OUT OF 25 WHICH IS REALLY A GOOD PERCENTAGE AS FAR AS INVESTMENT MISSIONS ARE CONCERNED .

ANOTHER FACET OF OUR COMPLEMENTARITY WITH JAPAN INVOLVES THE DEMOGRAPHIC REALITIES BETWEEN OUR TWO COUNTRIES. JAPAN HAS AN AGING POPULATION, THEY HAVE A PROBLEM IN THEIR OLD-AGED HEALTH- CARE. WHILE THE PHILIPPINES HAS A YOUNG POPULATION WHICH SUPPLIES SOME OF THE BEST-TRAINED AND COMPASSIONATE AND BEST QUALITY HEALTH-CARE WORKERS IN THE WORLD. A GROWING NUMBER OF COUNTRIES IN NORTH AMERICA, EUROPE AND THE MIDDLE EAST NOW HOST FILIPINO HEALTH-CARE GIVERS. AND SO, THIS IS ANOTHER AREA OF COMPLEMENTARITY BETWEEN JAPAN AND THE PHILIPPINES.

THE MARKET IS BEGINNING TO RECOGNIZE THE DEMAND FOR OUR HEALTH CARE WORKERS, FORTY NEW NURSING SCHOOLS, PRIVATE NURSING SCHOOLS HAVE BEEN SET UP IN THE PHILIPPINES AS A RESPONSE TO THIS DEMAND. AND THE JOB OF THE GOVERNMENT , BECAUSE THIS IS SET UP BY THE PRIVATE SECTOR RESPONDING TO THE MARKET, IS TO ENSURE THAT THESE SCHOOLS WILL CONTINUE THE QUALITY EDUCATION THAT OUR NURSES WHO ARE NOW ALL OVER THE WORLD HAVE RECEIVED ALL THE THE QUALITY TRAINING, BECAUSE WE WANT THAT AS WE INCREASED THE QUANTITY OF NURSES THE QUALITY WILL ALSO BE MAINTAINED. THE QUALITY THAT HAS GIVEN US A GOOD REPUTATION. THAT'S WHY, I AM VERY GRATEFUL TO CONGRESS ESPECIALLY THE SENATE UNDER THE LEADERSHIP OF SENATOR JUAN FLAVIER WHO KNOWS THE HEALTH SECTOR VERY WELL, IN REORGANIZING OR RATHER ENHANCING AND STRENGTHENING THE NURSING BOARD, INCREASING THE NUMBER OF MEMBERS OF THE BOARD BECAUSE THEY HAVE TO GO AND INSPECT ALL OF THESE NEW SCHOOLS TO MAINTAIN THE QUALITY.

IN THIS CENTURY OF GLOBALIZATION, THE PHILIPPINES WILL MAINTAIN ECONOMIC TIES AND ENTER INTO ECONOMIC PARTNERSHIPS WITH OTHER COUNTRIES TO THE EXTENT THAT THESE PARTNERSHIPS ARE CONSISTENT WITH THE WELFARE OF OUR PEOPLE.

IN THE CASE OF JAPAN, LONG-LASTING CLOSE ECONOMIC TIES BETWEEN THE TWO COUNTRIES HAVE DEVELOPED OVER MANY YEARS. JAPAN PROVIDES 60 PERCENT OF THE OFFICIAL DEVELOPMENT ASSISTANCE RECEIVED BY THE PHILIPPINES. JAPAN IS OUR SECOND LARGEST SOURCE OF TRADE, INVESTMENTS, AND TOURISM.

SINCE WE HAVE THESE LONG-LASTING CLOSE ECONOMIC TIES ANYWAY, AND SINCE THESE TIES ARE BOUND TO INCREASE WITH THE INEXORABLE FORCES OF THE 21^ST CENTURY, WE MIGHT AS WELL SHAPE THE ECONOMIC TIES IN SUCH A WAY THAT WILL STRENGTHEN THE COMPLEMENTARITIES OF OUR TWO ECONOMIES, RATHER THAN MAKING OUR PRODUCTS COMPETE IN EACH OTHER'S MARKETS.

IN THIS COMPETITIVE 21ST CENTURY, WE DO NEED TO STRENGTHEN OUR COMPETITIVE- NESS. THIS MEANS ATTENTION TO QUALITY. SO, I'M GLAD THAT TODAY IN THE FIELD OF MANAGEMENT, OUR P-Q-A RECIPIENTS, PSI TECHNOLOGIES AND ON SEMI-CONDUCTORS ARE THIS YEAR'S BEST EXAMPLES OF QUALITY. THEY HAVE ALSO BEEN STEADY SOURCES OF JOBS FOR THOUSANDS OF FILIPINOS, AND ARE IMPORTANT CONTRIBUTORS TO DOMESTIC OUTPUT AND PRODUCTIVITY IN THE ELECTRONICS INDUSTRY. BOTH ARE OUR BIGGEST EXPORTERS OF ELECTRONIC SEMICONDUCTORS. AND I CONGRATULATE THEM.

THE QUALITY OF OUR ELECTRONICS PRODUCTS HAS BEEN LARGELY RESPONSIBLE FOR THE GROWTH OF OUR EXPORTS. DESPITE THE GLOBAL SLUMP, OUR TOTAL EXPORTS FOR THIS YEAR GREW BY WHAT? 8.9 PERCENT DANTE? AS AGAINST A FORECAST OF ZERO GROWTH. THAT WAS OUR FORECAST AT THE BEGINNING OF THE YEAR. THE ELECTRONICS

INDUSTRY POSTS THE HIGHEST CONTRIBUTION, ELECTRONICS IS 69 PERCENT OF TOTAL EXPORT EARNINGS.

OUR EXPORTS IN ELECTRONICS HAVE RESUMED -- BECAUSE THEY WERE DOWN LAST YEAR -- NOT BECAUSE THE INTERNATIONAL MARKET IS RECOVERING, BUT BECAUSE WE ARE GETTING A BIGGER MARKET SHARE. AGAIN I CONGRATULATE OUR ELECTRONICS AND SEMICONDUCTORS.

I WENT TO SILICON VALLEY A FEW WEEKS AGO, AND FOUND THAT SILICON VALLEY GROWTH IS FLAT, BUT PHILIPPINE ELECTRONICS ARE GROWING. CHINA HAS ENTERED THE WTO, AND PHILIPPINE EXPORTS TO CHINA HAVE GROWN BY 80 PERCENT, AND FROM A TRADE DEFICIT WITH CHINA OF 300 MILLION DOLLARS WE NOW HAVE A TRADE SURPLUS OF 700 MILLION DOLLARS. AND IN THIS NEW MARKET OF CHINA, AGAIN OUR NUMBER ONE EXPORT IS ELECTRONICS. YOU, THE QUALITY FIRMS, DESERVE CREDIT FOR THIS. CONGRATULATIONS TO YOU AND CONGRATULATIONS TO PSI BECAUSE YOU WILL BE ENTERING THE CHINA MARKET AS WELL WHEREAS ON SELLS TO THE U.S. AND TO EUROPE.

OUR EXPERIENCE WITH CHINA SHOWS THAT TRADE CAN PROVIDE GREATER OPPORTUNITIES FOR PHILIPPINE BUSINESSES. THE PHILIPPINES IS POSITIONING ITSELF WITHIN ASIA, EAST ASIA THE FASTEST GROWING PART OF THE WORLD TODAY. GEOGRAPHICALLY, THE PHILIPPINES IS LOCATED IN THE CENTER OF ASIA-PACIFIC, WHICH MEANS THAT ALL MAJOR ASIAN CITIES CAN BE REACHED IN AS LITTLE AS 3-4 HOURS. AND WE HAVE THE MANPOWER CAPABILITY TO SERVICE THE VARIOUS NEEDS THAT THE NEW ECONOMIC REALIGNMENT WOULD DEMAND.

AS A REGIONAL HUB, THE PHILIPPINES IS WELL POSITIONED TO TAKE ADVANTAGE OF THE RAPIDLY EXPANDING MARKET OF CHINA. WE REGARD CHINA, ESPECIALLY AFTER ITS ACCESSION TO THE WTO, AND GIVEN THIS, WOULD-EXPERIENCE OF OUR ELECTRONICS FIRMS NOT TO MENTION OUR COPPER AND ALSO OUR TROPICAL FRUIT FIRMS, CHINA IS A LUCRATIVE MARKET FOR THESE PRODUCTS. IT IS A MARKET FOR OUR LOGISTICS SERVICES, FOR OUR MANUFACTURING, AND OUR COMMODITY FIRMS.

AND THIS IS ALSO TRUE FOR OUR EXPERIENCE WITH JAPANESE FIRMS, FURTHER EXAMPLE, TOYOTA WILL BE PUTTING UP A SWEET POTATO FACTORY AND PLANTATION IN SOUTHERN TAGALOG TO SELL TO THE CHINA MARKET. JAPANESE CAPITAL, PHILIPPINE LABOR, PHILIPPINE HUMAN RESOURCES AND CHINESE MARKET. THAT'S THE WAY TO GO IN THE 21ST CENTURY.

MATSUSHITA WILL EXPAND THEIR PHILIPPINE AIR CONDITION FACTORY, THEY VISITED ME IN JAPAN TO TELL ME THAT. AND, THEY WILL LIKELY CONSOLIDATE THEIR OPERATIONS BY RELOCATING THEIR WINDOW-TYPE AIR CONDITION FACTORY FROM ANOTHER ASEAN COUNTRY TO THE PHILIPPINES. BUT THIS AIR CONDITION FACTORY WILL SELL NOT ONLY TO OUR DOMESTIC MARKET , IT WILL SELL TO THE OTHER ASEAN COUNTRIES FROM WHICH THEY WILL TRANSFER THEIR MANUFACTURING FACILITIES AS WELL AS OTHER MARKETS.

TOSHIBA LIKEWISE TRANSFERRED ITS COMPUTER FACTORY, IT'S TOSHIBA RIGHT? IN THE UNITED STATES, THEY TRANSFERRED IT TO THE PHILIPPINES, BUT STILL SELLING TO THE U.S. MARKET. SO, WHEN YOU GO THERE TO THE U.S. AND ENTERED A COMPUTER SHOP AND YOU BUY A TOSHIBA COMPUTER --IT'S MADE IN THE PHILIPPINES.

HONDA STARTED PRODUCING AUTOMOBILE TRANSMISSION COMPONENTS IN THE PHILIPPINES FOR THE ASEAN MARKET, BUT IS NOW EXPANDING ITS PRODUCTION TO SERVE THE WORLD MARKET AS WELL. TOYOTA WILL PRODUCE TRANSMISSION COMPONENTS AS WELL, FOR THE JAPANESE MARKET. THE FIRST TIME IT WILL PRODUCE IN THE PHILIPPINES FOR ITS OWN NATIVE MARKET. ALL THESE SHOW, THAT TRADE PROVIDES LARGER ECONOMIES OF SCALE FOR BUSINESSES IN THE PHILIPPINES.

THERE WILL BE MORE OF THESE DEVELOPMENTS IF WE FORMALIZE AN ECONOMIC PARTNERSHIP AGREEMENT WITH JAPAN. EFFORTS ARE ONGOING TO ESTABLISH THIS FORMAL PARTNERSHIP. A WORKING GROUP WAS ESTABLISHED LAST AUGUST, LED BY THE DTI WHICH FORMALLY MET LAST OCTOBER AND NOVEMBER. THE WORKING GROUP DISCUSSED AREAS OF COOPERATION, RANGING FROM TRADE AND INVESTMENT TO VARIOUS OTHER BILATERAL PARTNERSHIPS AND LINKAGES, NOT ONLY AIR CONDITION,

NOT ONLY AUTOMOTIVE WHICH IS A MAJOR JAPANESE INVESTMENT IN THE PHILIPPINES, NOT ONLY I.T. SERVICE, OH, YES, NOT ONLY AIR CONDITION, NOT ONLY AUTOMOTIVE, NOT ONLY AGRICULTURAL PRODUCTS BUT TO ME MOST NOTABLY -- SERVICES AND HUMAN RESOURCE DEVELOPMENT. PART OF THIS, WOULD TEACH JAPANESE TO OUR HEALTH-CARE GIVERS AND I.T. WORKERS SO THAT THEY CAN BE MORE ACCEPTABLE AND SUCCESSFUL IN THE JAPANESE MARKET.

THE INCLUSION OF HUMAN RESOURCES LIKE HEALTH-CARE GIVERS AND I.T. WORKERS MAKES THE JAPAN - PHILIPPINES ECONOMIC PARTNERSHIP A NOVEL FORM OF ECONOMIC PARTNERSHIP AND COULD PLAY A CATALYTIC ROLE IN ACCELERATING GLOBAL TRADE RULE-MAKING. USUALLY WHEN YOU TALK ABOUT AGREEMENTS, YOU'RE DEBATING ABOUT MANUFACTURING, ABOUT AGRICULTURE, HERE, WE HAVE STRONGLY ADVOCATED THE INCLUSION OF HUMAN RESOURCES ESPECIALLY IN HEALTH-CARE AND I.T. PIME MINISTER KOIZUMI AND I HAVE THEREFORE INSTRUCTED THE RELEVANT MINISTRIES WITHIN OUR RESPECTIVE GOVERNMENTS TO WORK MORE CLOSELY TOWARDS THE ESTABLISHMENT OF THIS PARTNERSHIP.

THOSE WHO CAN TAKE ADVANTAGE OF THIS PARTNERSHIP ARE THOSE WHO PRODUCED QUALITY PRODUCTS AND SERVICES, THE TYPES OF PRODUCTS AND SERVICES EXEMPLIFIED BY OUR QUALITY AWARDEES.

AND SO, ONCE AGAIN, TO OUR AWARDEES, CONGRATULATIONS AND MAY YOUR TRIBE OF QUALITY FIRMS INCREASE. THANK YOU!

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