PGMA's Speech during the dialogue with the Japan Federation of Economic Organizations (Keidanren)

International Conference Hall, Keidanren Kaikan Building, Okura, Japan (22 May 2002)
MR. ODA; MR. ORASHIMA; MR. FUJIWARA; OFFICERS AND MEMBERS OF KEIDANREN; FRIENDS FROM THE JAPANESE BUSINESS COMMUNITY; DISTINGUISHED GUESTS; LADIES AND GENTLEMEN:

LET ME FIRST EXPRESS MY THANKS TO KEIDANREN, FOR INVITING ME TO SPEAK BEFORE YOUR DISTINGUISHED AND VERY INFLUENTIAL ORGANIZATION. MY THANKS, TOO, TO THE ASEAN-JAPAN CENTER FOR CO-SPONSORING THIS BUSINESS MEETING.

SINCE THE ESTABLISHMENT OF PHILIPPINE-JAPAN DIPLOMATIC RELATIONS IN 1956, AND SINCE THE VISIT OF THEIR IMPERIAL MAJESTIES TO THE PHILIPPINES AS CROWN PRINCE AND PRINCESS WHEN MY FATHER DIOSDADO MACAPAGAL WAS PRESIDENT OF THE PHILIPPINES, JAPAN HAS BECOME A LEADING PARTNER OF THE PHILIPPINES IN TRADE, INVESTMENTS, TOURISM, AND OFFICIAL DEVELOPMENT ASSISTANCE.

AND EVEN TODAY, JAPAN CONTINUES TO BE A MAJOR PLAYER IN THE ASIAN REGION. JAPAN'S GDP STILL ACCOUNTS FOR MORE THAN 60 PERCENT OF THE REGION'S TOTAL. AT THE SAME TIME, ITS LEADERSHIP IN VARIOUS TECHNOLOGICAL FIELDS, INCLUDING INFORMATION AND COMMUNICATION TECHNOLOGY, AND MANY INDUSTRIES SUCH AS CAR MANUFACTURING AND ROBOTICS, IS WIDELY RECOGNIZED.

AS THE LARGEST ECONOMY IN THE REGION, JAPAN LED EAST ASIA'S ECONOMIC TRANSFORMATION DURING THE LATTER PART OF THE 20th CENTURY. TODAY, JAPAN IS EMBARKING ON MAJOR INDUSTRIAL REFORMS AND FISCAL RESTRUCTURING.

I PRAISE JAPAN FOR ITS CONTINUING ECONOMIC LEADERSHIP AND I HAVE FULL CONFIDENCE IN JAPAN'S ECONOMIC RECOVERY.

JAPAN MUST HELP LEAD ASIA TO A NEW LEVEL OF PROMINENCE IN THE WORLD ECONOMY AND WORLD AFFAIRS. THE PHILIPPINES IS CONFIDENT THAT WITH JAPAN LEADING THE WAY, THE REGION WILL FLOURISH.

IN THIS, THE ROLE OF KEIDANREN HAS BEEN INSTRUMENTAL. KEIDANREN HAS BEEN ACTIVE IN ELEVATING THE RELATIONSHIP BETWEEN JAPAN'S PRIVATE SECTOR AND THE PHILIPPINES INTO ONE OF THE MOST PRODUCTIVE AND STABLE ASPECTS OF OUR BILATERAL RELATIONS.

JAPAN CAN COUNT ON THE PHILIPPINES AS A RENEWED PARTNER IN ASIA TO FIGHT FOR ECONOMIC REFORM, REGIONAL STABILITY, AND SOCIAL JUSTICE. WE AIM TO HARNESS THE CREATIVITY, INDUSTRIOUSNESS AND SKILL OF OUR GLOBAL FILIPINO WORKFORCE TO BRING CHANGE TO OUR LIVES IN THE PHILIPPINES AND TO OUR NEIGHBORS IN ASIA.

WE HAVE A PLAN IN THE PHILIPPINES, AND WE ARE ON TRACK IN ACHIEVING ITS GOALS.

SINCE ASSUMING THE PRESIDENCY IN JANUARY OF 2001, I HAVE FIRMLY SET MY SIGHT ON WINNING THE WAR AGAINST POVERTY WITHIN THE DECADE. TO WIN THIS WAR, I HAVE PLEDGED GOOD GOVERNANCE.

GOOD GOVERNANCE MEANS THE FOLLOWING PILLARS:

FIRST, A SOUND MORAL FOUNDATION TO GUIDE OUR LEADERSHIP AT ALL LEVELS.

SECOND, A PHILOSOPHY OF TRANSPARENCY IN ALL GOVERNMENT ACTIONS.

THIRD, AN ETHIC OF EFFECTIVE IMPLEMENTATION THROUGHOUT THE BUREAUCRACY.

WITH THE COMBINATION OF THE RIGHT NATIONAL AGENDA AND ITS IMPLEMENTATION THROUGH GOOD GOVERNANCE, I AM CONFIDENT THAT THE PHILIPPINES CAN WIN THE STRUGGLE OF TODAY AGAINST POVERTY AND, IN TIME, TOMORROW'S STRUGGLE FOR OUR NATION'S PROPER PLACE WITHIN THE 21st CENTURY.

OUR NATIONAL AGENDA HAS FOUR COMPONENTS. THE FIRST PERTAINS TO AN ECONOMIC PHILOSOPHY OF FREE ENTERPRISE BY THE PRIVATE SECTOR APPROPRIATE TO THE 21st CENTURY. WE ARE SEEKING TO EMPOWER THE FILIPINO ENTREPRENEUR TO COMPETE FREELY IN THE GLOBAL ECONOMY, WHEREIN TRANSPARENCY AND A LEVEL PLAYING FIELD ARE NOW INDISPENSABLE, AND INFORMATION AND COMMUNICATIONS TECHNOLOGY IS RAPIDLY ADVANCING.

AT THE CORE OF THE PHILOSOPHY OF FREE ENTERPRISE IS THE CONVICTION THAT GOVERNMENT'S ROLE IS NOT TO CONTROL THE MARKET, BUT TO BUILD A FAVORABLE MARKET ENVIRONMENT -- A SUSTAINABLE SYSTEM WHERE THE HARD WORK, CREATIVITY, AND INITIATIVES OF THE PRIVATE SECTOR WOULD BE REWARDED.

WE HAVE ENGAGED IN STRUCTURAL REFORMS, SUCH AS THE RESTRUCTURING OF THE POWER SECTOR WITH THE ELECTRICITY INDUSTRY REFORM ACT. WE HAVE ALSO PASSED THE ANTI-MONEY LAUNDERING LAW, TO ENSURE THE INTEGRITY OF OUR FINANCIAL TRANSACTIONS WITH THE REST OF THE WORLD.

WE HAVE BEEN INSTITUTING MARKET-FRIENDLY LAWS AND REGULATIONS THAT AIM TO REDUCE THE COST OF DOING BUSINESS, AND TO REMOVE BOTTLENECKS TO INVESTMENT. WE ARE WORKING HARD TO REPLACE OVERLY CONFRONTATIONAL LABOR-MANAGEMENT RELATIONS WITH MORE PRO-ACTIVE INSTRUMENTS OF INDUSTRIAL PEACE.

THE SECOND COMPONENT OF OUR NATIONAL AGENDA AGAINST POVERTY IS THE MODERNIZATION OF THE AGRICULTURAL SECTOR, WHICH ACCOUNTS FOR THE MAJORITY OF OUR POOR.

THE THIRD COMPONENT OF OUR NATIONAL AGENDA IS OUR SOCIAL BIAS TOWARDS THE DISADVANTAGED. MY ECONOMIC MANAGERS AND I BELIEVE THAT AFFIRMATIVE ACTION IS NECESSARY TO END THE CYCLE OF POVERTY IN OUR COUNTRY.

FINALLY, THE FOURTH COMPONENT OF OUR NATIONAL AGENDA, REQUIRES THAT I PERSONALLY LEAD A CAMPAIGN TO RAISE MORAL STANDARDS IN GOVERNMENT AND SOCIETY.

AS A RESULT OF OUR PLAN'S IMPLEMENTATION THROUGH GOOD GOVERNANCE AFTER ONE YEAR THAT I HAVE BEEN PRESIDENT, OUR ECONOMY POSTED A G.N.P. GROWTH RATE OF 3.7 PERCENT. THIS ACHIEVEMENT WAS ONE OF THE FEW BRIGHT SPOTS FOR 2001, WHICH SAW MANY ASIAN ECONOMIES EXPERIENCE RECESSION OR STAGNATION.

OUR GROWTH WAS SUSTAINED BY SOUND MACROECONOMIC MANAGEMENT.

HIGH ON MY ACTION AGENDA WAS THE UNDOING OF THE LARGE BUDGET DEFICIT THAT I INHERITED FROM THE PREVIOUS ADMINISTRATION. WE, THEREFORE INSTITUTED A FISCAL POLICY THAT AIMS FOR A BALANCED NATIONAL BUDGET BY THE YEAR 2006. IN LIMITING GOVERNMENT EXPENDITURES, HOWEVER, WE DO NOT SCRIMP ON OUR PRINCIPAL GROWTH DRIVERS SUCH AS AGRICULTURAL MODERNIZATION, BASIC EDUCATION AND TRAINING, HEALTH, AND POVERTY REDUCTION.

OUR FISCAL AND MONETARY POLICIES HAVE LED TO A FAVORABLE MARKET RESPONSE. INTEREST RATES HAVE FALLEN, WITH THE RATE OF THE 91-DAY TREASURY BILL WHICH IS THE BAROMETER OF BANKS IN PRICING THEIR LOANS -- REACHING HISTORIC LOWS. AT THE SAME TIME, INFLATION HAS DECLINED, FROM 7.9 PERCENT IN JANUARY 2001 AT THE TIME I TOOK OVER TO 3.6 PERCENT LAST MONTH.

THESE DEVELOPMENTS BEGET MORE POSITIVE DEVELOPMENTS, SUCH AS A REDUCTION OF INTEREST PAYMENTS IN THE EXPENDITURE PROGRAM OF THE NATIONAL GOVERNMENT, AND THE TIGHTENING OF SPREADS OF THE COUNTRY'S SOVEREIGN ISSUANCES, MAKING FUTURE GOVERNMENT BORROWINGS CHEAPER.

THINGS ARE LOOKING UP FOR THE PHILIPPINES, AND IT IS THE MAJOR CREDIT RATING AGENCIES THAT ARE SAYING THIS. THE STEADY AND SURE PERFORMANCE OF THE ECONOMY HAS CONVINCED THEM TO UPGRADE THE COUNTRY'S CREDIT RATING OUTLOOK FROM NEGATIVE TO STABLE GIVEN THE SHORT SPAN OF TIME MY ADMINISTRATION HAS GOVERNED, THAT IS A MAJOR ACHIEVEMENT, FROM WHICH WE SHALL CONTINUE TO BUILD UPON.

OUR EFFORTS TO STABILIZE OUR MACROECONOMIC FUNDAMENTALS AIM TO PREPARE THE COUNTRY FOR MORE DOMESTIC AND FOREIGN INVESTMENTS.

TO ATTRACT INVESTMENTS, MY ADMINISTRATION IS WORKING, AS I SAID EARLIER, TO REMOVE BOTTLENECKS TO PRODUCTIVITY. WE HAVE ALREADY ADDRESSED ONE BOTTLENECK, AS I SAID EARLIER, THE COST OF POWER.

THE PHILIPPINES ALSO ATTACHES GREAT IMPORTANCE TO INFRASTRUCTURE DEVELOPMENT. AND HERE, ANOTHER MANIFESTATION OF OUR BELIEF IN GROWTH LED BY THE PRIVATE SECTOR IS THE ADVANCEMENT OF MANY PROJECTS UNDER THE BUILD-OPERATE-AND-TRANSFER SCHEME.

AT THE SAME TIME, WE HAVE ESTABLISHED SEVERAL INDUSTRIAL PARTS AND EXPORT PROCESSING ZONES. THESE ARE SELF-CONTAINED ZONES THAT HAVE THEIR OWN ELECTRICAL POWER AND WATER SUPPLIES, AND OTHER REQUIRED INFRASTRUCTURES.

THERE IS ALSO A HUMAN COMPONENT TO INVESTMENTS, AND I AM PROUD TO INFORM YOU THAT THE PHILIPPINES IS BRIMMING WITH SKILLED WORKERS. THE NUMBER OF JAPANESE FIRMS DOING ICT WORK IN THE PHILIPPINES IS A QUIET, BUT STRONG ACKNOWLEDGMENT OF THE ABUNDANCE OF FILIPINO TALENT.

WE AIM TO USE OUR ADVANTAGE IN PEOPLE TO PROPEL US INTO THE FRONTIERS OF THE KNOWLEDGE SOCIETY.

OUR ICT PROGRAM, FOR EXAMPLE, IS MEANT TO NURTURE THE DEVELOPMENT OF PEOPLE WHO CAN ADD VALUE -- FOR EXAMPLE, THOSE WHO CAN FASHION THE BINARY CODES INTO SOFTWARE THAT WOULD SERVE AN IMPORTANT NEED IN BUSINESS, INDUSTRY, EDUCATION, GOVERNANCE OR SERVICES.

IN CREATING A KNOWLEDGE SOCIETY, THE PHILIPPINES CAN TAKE ADVANTAGE OF ITS YOUNG DEMOGRAPHIC PROFILE. PRESENTLY, 49 PERCENT OF OUR POPULATION ARE OF WORKING AGE. TWENTY YEARS FROM NOW, THE PROJECTIONS SHOW THAT THE WORKING POPULATION WOULD MAKE UP 58 PERCENT OF THE POPULATION.

TO SUSTAIN OUR COMPETITIVE ADVANTAGE, MY ADMINISTRATION HAS RENEWED THE COMMITMENT TO PEACE AND STABILITY, WHILE UPHOLDING THE RULE OF LAW. WE HAVE ALLOCATED MORE RESOURCES TO OUR MILITARY AND POLICE AUTHORITIES IN ADDITION TO NEW METHODS OF DEALING WITH CRIME AND TERRORISM.

AS THE LEADER OF THE PHILIPPINES, I AM DETERMINED TO STAY THE COURSE TO IMPROVE THE ECONOMY AND BRING POVERTY UNDER CONTROL.

THE PHILIPPINES WELCOMES JAPAN'S PROPOSAL FOR AN ASIA-WIDE ECONOMIC COOPERATION FRAMEWORK.

THUS I HAVE FORMED A WORKING GROUP TO STUDY THE FEASIBILITY OF REPLICATING THE JAPAN-SINGAPORE ECONOMIC PARTNERSHIP AGREEMENT, WHICH IS AN FTA PLUS ALPHA. THIS MODEL AGREEMENT GOES BEYOND LIBERALIZATION IN TRADE AND SERVICES, AND GOES INTO THE MOVEMENT OF PERSONNEL IN SPECIALIZED PROFESSIONS, AND THE EMPLOYMENT AND TRAINING OF SKILLED WORKERS.

JAPAN, CHINA AND ASEAN FORM AN ECONOMIC SPHERE TO RIVAL EUROPE AND NORTH AMERICA. WE MUST BE CONFIDENT AND BOLD IN CHARTING THE ECONOMIC SECURITY OF ASIA AND THE PROSPERITY OF OUR PEOPLES.

IT IS TIME FOR ASIA TO LEAD. WE CANNOT REMAIN ON THE SIDELINES. WE MUST STEP INTO THE BREACH AND ASSUME OUR RIGHTFUL ECONOMIC AND POLITICAL ROLE IN A FAST-MOVING WORLD.

I HAVE NEVER BEEN MORE CONFIDENT IN THE FUTURE OF ASIA IN OUR ABILITY TO COME TOGETHER TO SOLVE OUR PROBLEMS.

IT IS THE DAWN OF A NEW DAY IN ASIA AS JAPAN, CHINA AND ASEAN COME TOGETHER SEEKING GREATER ECONOMIC COOPERATION AND INTEGRATION. THE PHILIPPINES WELCOMES THIS DEVELOPMENT AND IS BRIMMING WITH CONFIDENCE AT THE ROLE WE CAN PLAY TO ASSERT THE ECONOMIC MIGHT OF THE REGION.

THANK YOU.

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