PGMA's Speech during the Luncheon hosted by the Heads of the Japanese Economic Organizations (Nippon Keidanren)

PGMA's Speech during the Luncheon hosted by the Heads of the Japanese Economic Organizations (Nippon Keidanren)

Rose Room, Tokyo Kaikan Tokyo, Japan (04 Dec 2002)

THANK YOU, SECRETARY ROXAS.

CHAIRMAN YAMAGUCHI, CHAIRMAN OKUDA, CHAIRMAN KOBAYASHI, VICE CHAIRMAN
SASAKI, CHAIRMAN TOLLUMI, CHAIRMAN KANEKO, OTHER DISTINGUISHED
REPRESENTATIVES FROM THE BUSINESS COMMUNITY, MEMBERS OF THE PHILIPPINE
DELEGATION, LADIES AND GENTLEMEN.

I'D LIKE TO THANK THE JAPANESE ECONOMIC ORGANIZATIONS FOR INVITING ME TO
THIS LUNCHEON VISIT DURING MY STATE VISIT TO YOUR GREAT COUNTRY.

IT IS IMPORTANT FOR ME TO MEET YOU OFTEN BECAUSE JAPAN, AS YAMAGUCHI SAN
HAS SAID, IS THE SECOND LARGEST TRADE PARTNER OF THE PHILIPPINES, AND JAPAN
ACCOUNTS FOR A SIZABLE AMOUNT OF FOREIGN DIRECT INVESTMENTS. YOUR OFFICIAL
DEVELOPMENT ASSISTANCE CONSTITUTES MORE THAN 60 PERCENT OF WHAT THE
PHILIPPINES RECEIVES FROM ABROAD.

JAPAN'S ECONOMY IS THE SECOND LARGEST IN THE WORLD. JAPAN'S GDP IS MORE
THAN HALF OF THE ENTIRE REGION. JAPAN HOUSES LEADING EDGE AND WORLD-CLASS
COMPANIES LIKE YOURS IN INDUSTRIES SUCH AS AUTOMOBILE, INFORMATION
TECHNOLOGY, ROBOTICS AND MACHINE TOOLS, TO NAME A FEW. IT IS THEREFORE IN
OUR COLLECTIVE INTERESTS TO SEE JAPAN SUCCEED IN SUSTAINING ITS ECONOMY AS
AN ENGINE OF GLOBAL GROWTH.

LET ME NOW UPDATE YOU ON DEVELOPMENTS ABOUT THE PHILIPPINE ECONOMY.

THE COUNTRY'S GROWTH IN THIS FIRST SEMESTER OF THIS YEAR IS THE HIGHEST SO
FAR AMONG THE FIVE LEADING ECONOMIES IN SOUTHEAST ASIA.

AND IN THE FIRST THREE QUARTERS OF THIS YEAR, PHILIPPINE GDP GREW BY 4.1
PERCENT. GDP WAS POWERED BY THE RECOVERY OF INDUSTRY AND CONTINUED
STRENGTHENING OF SERVICES. INDUSTRY GREW BY 3.8 PERCENT BECAUSE EXPORTS
GREW BY 8.9 PERCENT, AND PRIVATE CONSTRUCTION IS ON THE REBOUND. WHILE
EXPORT FIGURES TO JAPAN HAVE BEEN SLUGGISH, DEMAND WITHIN OTHER

PARTS OF ASIA MORE THAN TOOK UP THE SLACK, WITH EXPORTS TO CHINA ACCOUNTING
FOR A LARGE SHARE.

SERVICES GREW BY 5.1 PERCENT BECAUSE OF THE EXPANSION OF
TELECOMMUNICATIONS, TRADE AND PRIVATE SERVICES, INCLUDING TOURISM. THE
STRENGTH OF THE SERVICE SECTOR IS BASED LARGELY ON THE GAINS MADE BY THE
LIBERALIZATION AND DEREGULATION MEASURES THAT THE PHILIPPINES HAS PURSUED
OVER THE PAST FEW YEARS. THUS, FOLLOWING THE OPENING UP OF LONG DISTANCE
SERVICE AND MANDATORY INTERCONNECTIONS, THE COMMUNICATIONS SECTOR CONTINUES
TO REGISTER DOUBLE-DIGIT GROWTH RATES.

AND WITH CONTINUED RESPONSIBLE MONETARY, FISCAL AND SUPPLY-SIDE POLICIES,
INFLATION AND INTEREST RATES ARE THE LOWEST IN MORE THAN A DECADE.

WE ARE WELL ON OUR WAY TO MEET THE WORLD BANK FORECAST OF AN OVERALL GDP
GROWTH RATE OF AT LEAST 4 PERCENT FOR THE PHILIPPINES THIS YEAR, FROM THE
3.2 PERCENT THAT WAS ACHIEVED LAST YEAR. THE WORLD BANK FORECAST FOR THE
PHILIPPINES IS THE HIGHEST AMONG THE FOUR SOUTHEAST ASIAN COUNTRIES THAT
THE WORLD BANK RECENTLY REVIEWED. FURTHERMORE, THE WORLD BANK FORECASTS A
GROWTH RATE OF 4.3 PERCENT FOR THE YEAR 2003.

THE TRANSPORT SECTOR IS BENEFITING FROM THE MOTOR VEHICLE COMPLEMENTATION
SCHEME IN SOUTHEAST ASIA, AND FROM THE GROWING TRADE IN SPARE PARTS AND
COMPONENTS WITH EAST ASIA. IT IS IN THIS SECTOR THAT JAPAN HAS PROVEN TO
BE A VERY IMPORTANT PLAYER, AND WE SHALL CONTINUE TO FOSTER OUR CLOSE
PARTNERSHIP IN THIS AREA.

IN SEEKING SUSTAINABLE GROWTH, MY ADMINISTRATION CONTINUES TO FOCUS
UNSWERVINGLY ON BUILDING A STRONG PHILIPPINE REPUBLIC SIMILAR TO THE STRONG
JAPANESE DEMOCRATIC NATION. TWO ESSENTIAL FEATURES MARK OUT A STRONG
NATION. THE FIRST IS INDEPENDENCE FROM CLASS AND SECTORAL INTERESTS SO
THAT THE NATION STANDS FOR THE INTEREST OF THE PEOPLE RATHER THAN OF A
POWERFUL MINORITY. THE SECOND IS THE CAPACITY, REPRESENTED BY STRONG
INSTITUTIONS AND A STRONG BUREAUCRACY, TO EXECUTE GOOD POLICY AND DELIVER
ESSENTIAL SERVICES.

MY ADMINISTRATION CONTINUES TO FOCUS ON THE ESSENTIAL SERVICES THAT CONCERN
FIRMS THAT WOULD INVEST IN THE PHILIPPINES. THIS INCLUDES THE FOLLOWING:

POWER. AS YAMAGUCHI SAN HAS SAID, OUR PROGRAM TO REFORM THE POWER SECTOR
TO ASSURE ADEQUATE AND RELIABLE POWER SUPPLY TO CONSUMERS AND TO INDUSTRY WAS INITIATED
WITH THE PASSAGE OF THE ELECTRIC POWER INDUSTRY REFORM ACT LAST YEAR. IT
WAS PASSED LAST YEAR AFTER A DELAY OF 10 YEARS. AND I THANK SENATOR
PIMENTEL AND THE CONGRESSMEN AND CONGRESSWOMAN WHO ARE PRESENT HERE TODAY
BECAUSE THEY WERE THE ONES WHO DID THAT FOR OUR REPUBLIC. SINCE THEN,
POWER COST HAVE GONE DOWN. FROM BEING THE ECONOMY WITH THE SECONDMOST
EXPENSIVE ELECTRICITY RATES IN THE REGION, THE PHILIPPINES HAS GONE DOWN TO
BEING NUMBER SIX. AND WE AIM TO REDUCE POWER COST EVEN MORE THROUGH A
COMPREHENSIVE ENERGY LIBERALIZATION PROGRAM THAT COVERS POWER GENERATION,
TRANSMISSION AND DISTRIBUTION.

FOR THE WORK FORCE. THE JAPANESE ARE WITNESSES TO THE CREATIVITY,
INDUSTRIOUSNESS AND SKILL OF THE GREAT FILIPINO WORKER. AND NOW WITH ALL
OUR EFFORTS, WE HAVE THE LOWEST STRIKE RATE IN THE LAST 20 YEARS. THE
COUNTRY'S MAINSTREAM LABOR GROUPS HAVE ANNOUNCED THAT THEY ARE SUSPENDING
DEMANDS FOR WAGE INCREASES. THE REPRESENTATIVES OF WORKERS AND EMPLOYERS IN
THE AUTOMOTIVE INDUSTRY RECENTLY COMMITTED TO PROMOTE PRO-ACTIVE AND
RESPONSIBLE USE OF PLANT LEVEL MECHANISMS IN SETTLING DISPUTES TO PREVENT
THEM FROM MATURING INTO ADVERSARIAL ACTIONS.

AS FOR THE RULE OF LAW. THE PHILIPPINES HAS A STABLE SYSTEM OF LAW AND
GOVERNMENT, AND GREAT TRANSPARENCY IN THE MEDIA THAT FORCES THE OFFICIALS
TO BEHAVE. IN THE AREA OF INTELLECTUAL PROPERTY RIGHTS, SIGNIFICANT GAINS
ARE BEING MADE NOT ONLY IN TERMS OF CONFORMITY TO GLOBAL RULES, BUT ALSO IN
TERMS OF VERY AGGRESSIVE IMPLEMENTATION. COMPARED TO OTHER COUNTRIES, THE
PHILIPPINES HAS A COMPETITIVE EDGE IN TERMS OF THE ENVIRONMENT FOR
INTELLECTUAL PROPERTY.

ON PEACE AND ORDER. MY ADMINISTRATION IS DISMANTLING KIDNAP SYNDICATES AND
GETTING RID OF RASCALS IN THE POLICE, ESPECIALLY IN METRO MANILA. ON THE
OTHER HAND, THE GLOBAL ENVIRONMENT, THE ADVERSE GLOBAL ENVIRONMENT HAS
PROVIDED OPPORTUNITIES TO ADDRESS OUR NATIONAL SECURITY CONCERNS.
NINE-ELEVEN, THE SUBSEQUENT WAR ON TERRORISM, AND THE LOOMING WAR IN IRAQ
HAVE ALL COMBINED TO DAMPEN THE WORLD ECONOMY. BUT EVEN BEFORE 9-11, WE
HAD ALREADY BEEN WAGING A WAR ON TERRORISM.

YOU WILL RECALL THAT THE ABU SAYYAF WAS ABLE TO GENERATE AT LEAST 20
MILLION DOLLARS IN RANSOM FROM SIPADAN IN THE YEAR 2000 WHICH STRENGTHENED
THEIR CAPABILITY FOR TERROR. BUT WITH OUR DECISIVE RESPONSE TO 9-11, WE
HAVE GAINED FOREIGN ALLIES IN OUR WAR AGAINST TERROR, WHICH ENABLED US TO
NEUTRALIZE THE NOTORIOUS ABU SABAYA LAST JUNE AND TO DEGRADE THE ABU SAYYAF
STRENGTH FROM THOUSANDS TO A COUPLE OF HUNDREDS.

THE PHILIPPINES IS POSITIONING ITSELF WITHIN EAST ASIA -- THE REGION OF THE
HIGHEST GROWTH IN THIS CENTURY -- AS A REGIONAL HUB. GEOGRAPHICALLY, THE
PHILIPPINES IS LOCATED IN THE CENTER OF THE ASIA-PACIFIC, WHICH MEANS ALL
MAJOR ASIAN CITIES CAN BE REACHED IN 3 TO 4 HOURS. BUT WE INTEND TO BECOME
A REGIONAL HUB NOT ONLY BY VIRTUE OF PROXIMITY, BUT ALSO BY PROVIDING
SERVICES TO THE REGION.

FIRST, IN INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS SERVICES. THE
PHILIPPINES HAS AN INTERNATIONAL REPUTATION FOR ITS EDGE IN EDUCATION,
ENGLISH PROFICIENCY, ADAPTABILITY AND EXPERTISE IN E-COMMERCE. THE
PHILIPPINES IS HIGHLY COMPETITIVE IN TERMS OF GETTING QUALITY LABOR IN
QUANTITY. AS AN ENGLISH-LITERATE COUNTRY, THE PHILIPPINES IS ABLE TO
ABSORB HIGH TECHNOLOGY EASILY. THIS IS WHY WORLD-CLASS FIRMS SUCH AS
INTEL, TEXAS INSTRUMENTS AND AMKOR ANNAM HAVE A STRONG PRESENCE IN OUR
COUNTRY AS WELL AS OTHER JAPANESE FIRMS THAT EXHIBITED IN YESTERDAY'S I.T.
EXHIBITION.

THE GROWTH OF PRIVATE SERVICES SUCH AS CALL CENTERS, BACKROOM OPERATIONS
AND SOFTWARE DESIGN IS ACCELERATING EVEN AS MY GOVERNMENT CONTINUES TO
CULTIVATE A DYNAMIC I.T. SECTOR. THE I.T. FAIR BEING HELD IN TOKYO IS A
MAJOR VENUE WHERE OUR I.T. FIRMS CAN MERGE THEIR STRENGTHS.

AS A REGIONAL HUB, THE PHILIPPINES IS WELL-POSITIONED TO TAKE ADVANTAGE OF
THE RAPIDLY EXPANDING MARKET OF CHINA. WITH REGARD CHINA, ESPECIALLY AFTER
ITS ACCESSION TO THE WTO, WE SEE THIS AS A LUCRATIVE MARKET FOR OUR
LOGISTICS SERVICES, MANUFACTURING AND COMMODITY FIRMS. BEFORE CHINA JOINED THE WTO, WE HAD
A TRADE DEFICIT WITH CHINA OF 300 MILLION DOLLARS. AFTER CHINA ENTERED
WTO, WE NOW ENJOY A TRADE SURPLUS OF 700 MILLION DOLLARS.

WE ARE ALSO WORKING TO MAKE MAKATI, WHOM MANY OF YOU KNOW AS OUR PREMIER
COMMERCIAL CENTER, A SPECIFIC URBAN TOURIST DESTINATION. THE BIGGEST
SPENDING JAPANESE TOURIST IS THE SINGLE WORKING FEMALE. THEY PREFER
URBANIZED DESTINATIONS LIKE HONGKONG AND HONOLULU, WHERE THEY

TRAVEL IN SMALL GROUPS OF FRIENDS FOR SHOPPING AND REST AND RECREATION.
MAKATI IN THE PHILIPPINES WITH ITS COMPACT, EASY TO SECURE LOCATION,
WORLD-CLASS MALLS, ENTERTAINMENT FACILITIES AND CHEAP SHOPPING CAN BE
PROMOTED AS AN ATTRACTIVE DESTINATION WITH A SIDE TRIP TO ONE OF OUR MANY
BEACH RESORTS AS PART OF THE PACKAGE. I HAVE INSTRUCTED THE DEPARTMENT OF
TOURISM TO SPECIFICALLY PROMOTE THIS CONCEPT TO JAPAN'S TOURIST AGENCIES
AND BUREAUS BY HOSTING GROUPS OF OFFICIALS OF SUCH AGENCIES AND BUREAUS TO
COME TO THE PHILIPPINES TO SEE FOR THEMSELVES.

AS WE POSITION OURSELVES TO BE A REGIONAL HUB, WE ALSO TAKE CARE OF
ENSURING THE PROPER MACROECONOMIC ENVIRONMENT FOR BUSINESS FIRMS TO THRIVE.

WE HAVE PUT TOGETHER A GOOD NEW TEAM TO INCREASE OUR TAX COLLECTIONS. IT
IS HEADED BY A NEW COMMISSIONER OF INTERNAL REVENUE WHO IS PRECEDED BY HIS
IMPRESSIVE RECORD WHEN HE WAS COMMISSIONER OF CUSTOMS, AND WHO HAS THE
PERSONAL INTEGRITY, THE TECHNOLOGICAL COMPETENCE, AND THE PEOPLE'S SKILLS
TO MEET THE TARGET SET FOR THE REST OF THE MEDIUM-TERM PLAN PERIOD. HIS
WORK WILL BE COMPLEMENTED BY A NEW ANTI-SMUGGLING INTELLIGENCE AND
INVESTIGATION COMMISSION.

WE ARE COMMITTED TO NOT ONLY SHORT-TERM BUT LONG-TERM STRUCTURAL REFORMS.
THE SPECIAL ASSET MANAGEMENT COMPANY BILL, WHICH HAS NOW PASSED BOTH HOUSES
OF CONGRESS SHOULD FREE UP MORE BANK RESOURCES FOR EXPORT AND OTHER
PROJECTS THAT THE GOVERNMENT IS NOT IN A FISCAL POSITION TO FUND.

THE BILL TO MAKE LAND ACCEPTABLE AS BANK COLLATERAL, WHICH PASSED THE HOUSE
OF REPRESENTATIVES LAST WEEK WILL STIMULATE PRIVATE INVESTMENTS IN
AGRICULTURE.

IN THE INTERNATIONAL FRONT, THE PHILIPPINES ATTACHES GREAT IMPORTANCE TO
ENSURING THAT THE DOHA ROUND OF THE WTO DELIVERS ITS PROMISE TO MAINSTREAM
TRADE INTO THE DEVELOPMENT AGENDA SO THAT IT CAN CONTRIBUTE TO ECONOMIC
GROWTH, SUSTAINABLE DEVELOPMENT AND POVERTY ALLEVIATION.

IN THE REGIONAL FRONT, THE INTEREST OF JAPAN, CHINA AND INDIA, THE DOMINANT
ECONOMIES IN ASIA TO JOIN THE ASEAN FREE TRADE AREA INDICATES THE
COMFORTING STRENGTH OF THE LARGER, INTEGRATED MARKETS.

BY CREATING A POWERFUL TRADE AREA, WE EXPECT BUSINESS FIRMS LIKE YOURS TO
DIRECT YOUR INVESTMENTS INTO THE NATURAL STRENGTHS OF THE VARIOUS
MEMBER-ECONOMIES. IT MAKES PERFECT SENSE NOT TO LIMIT YOUR INVESTMENTS TO
ONLY ONE COUNTRY, SO THAT YOU CAN HEDGE AGAINST POLITICAL AND ECONOMIC
RISKS.

JAPAN WILL ALWAYS BE AN IMPORTANT PARTNER OF THE PHILIPPINES, AND INDEED OF
THE WHOLE EAST ASIA REGION IN OUR COMMON RESOLVE TO BUILD A REGIONAL
COMMUNITY WHERE THERE IS ECONOMIC AND HUMAN SECURITY, AND WHERE OUR PEOPLE
WOULD BE ABLE TO REALIZE THEIR POTENTIALS IN KEEPING WITH THEIR FUNDAMENTAL
VALUES.

THE BUSINESS COMMUNITY HAS A LARGE ROLE TO PLAY IN REALIZING THIS VISION.
SO I ASK YOU, LEADERS OF THE JAPANESE COMMUNITY, LET US MOVE FORWARD
TOGETHER. LET US MAKE ASEAN PROSPEROUS. LET US MAKE THE PHILIPPINES
PROSPEROUS BECAUSE THAT IS WHAT WILL MAKE JAPAN PROSPEROUS AND THEREFORE
THE REST OF OUR REGION PROSPEROUS.

THANK YOU.

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