PGMA's Speech during the First International Conference and Exhibition on Business and Information and Communication Technology

PGMA's Speech during the First International Conference and Exhibition on Business and Information and Communication Technology

Mediterranean Room, Waterfront Cebu City Hotel Lahug, Cebu City, Cebu (22 June 2005)

Thank you very much, DTI Secretary Johnny Santos for your introduction.

Thank you, Governor Gwen Garcia for receiving me in the airport earlier and accompanying me here; I'd like to welcome your fellow Governor Migs Dominguez, thank you for being here and for your support; of course, I'd like to congratulate Robert Go, president of the Cebu chamber for inviting me and nagging me and reminding me always about this event, very important event; Francis Monera, chairman of the Cebu Business Month. And this is a very important element of the business month; I'd like to greet also Mr. Bonifacio Belen, chairman of the Cebu ICT and Mr. Wilson Ng, chairman of the Cebu Chambers ICT committee; I've here with me native of Cebu, Secretary Cerge Remonde, Secretary Lotilla; and I'd like to greet all the other local government officials who are here today; ladies and gentlemen:

First of all, I'd like to thank Cebu chamber and all the many different associations who issued this manifesto expressing unconditional support for the governance of Gloria Macapagal-Arroyo. Thank you.

And for those who are not from Cebu, I'd like to thank you for being here in Cebu today. I am also happy to be in Cebu. I'm always happy being in Cebu. Today, I'm especially happy to be in Cebu to meet with the ICT business leaders to promote investments in the Philippines. Investments among Filipinos, investments among foreigners. Oh! There's Ver Peña. I'd like to greet also Ver Peña who's the chairman of the Commission on Information Technology.

In greeting you, before I go to ICT the industry, let me first and foremost mention again the good news. For the first time in a generation, I've passed the necessary legislation to raise revenue, balance the budget and collect taxes in order to set the Philippines on a path to prosperity. Since the elections last year, my economic priority has been to craft revenue legislation and challenge Congress to pass long overdue fiscal reforms. They obliged, and I thank our congressmen and senators for doing so, but it wasn't easy. But it had to be done. Our nation is paying for past sins. I could have neglected or perpetuated the sins of the past, the sins of greater debt that would fall on the next generation. But I didn't. It's wrong to leave the next generation deeper in debt and it's even economically indefensible.

As a result of that very strong push in the first phase, in the first year after elections, I've now done with the first phase of my economic reform plan. And I said earlier, I have in hand the largest revenue increase in a generation and the authority to raise more if necessary to ensure that we're on the path to economic stability and growth. We also have as I said earlier a fiscally responsible national budget and new legislation to ensure better revenue collection through better accountability.

Phase one of the reform process I will stress is now complete and the early signs are encouraging. The Value-Added Tax Bill has been passed. Fitch credit ratings agency forecasts that by next year the Philippines will have the lowest overall deficit in a long time.

Last April, we had the record tax collections, and even in this May, the last may the tax collection increased by 18 percent and our deficit is much lower than expected. These reforms as I said have delivered the largest revenue increase in a generation. And it is no coincidence that growth is up even during the difficult period last year when we were grappling with the revenue measures, the 2004 GDP growth was the highest in our country since the Asian crisis.

Johnny Santos reports to me that exports have grown in fact consistently for four years. This time Johnny 4.8 percent during the January to April period. Investor confidence is up with the approved foreign direct investments increasing 350 percent in 2004. And you in Cebu know this very well, visitor arrivals in the Philippines have grown by double digit percentages during this period of January to April. Our OFW has continued to remit dollars to us. In fact, the remittances grew by 19 percent last April to 790 million dollars and continues to grow at a steady clip.

And I might add yesterday -- I'm wondering why it wasn't in the papers. I guess because all the negatives must have taken toll -- but yesterday, Secretary Ging deles, our adviser on the peace process, reported that the Philippines and the MILF were able to include the informal discussions on the most contentious issue in the peace talks, the ancestral domain, and they signed an agreement yesterday.

There is more good news but that one I will have to tell you later today, I hope. In the meantime, there is more good news about our industry, this industry because you know that in just four years the outsourcing sector has grown from zero to 72,000 jobs. Just recently, Hong Kong and shanghai bank formally opened its business process outsourcing facility which will eventually employ 3,500 Filipinos at the north gate Cyberzone in Alabang.

The next phase of our reforms, phase two, will see investments in agri- business, on energy conservation and independence, the opening up of the mining sector and the promotion of the Philippines as a center for global... a global center for outsourcing.

You know, I've just declared June as ICT month, with your congress as the centerpiece event. ICT means many things for the Philippines -- jobs for our young people, a driver of investments, a tool for mass education and an instrument for good government.

This events demonstrates how successful we've been. From the start of my presidency to 2004. Because I gave figures earlier on BPO but BPO is not the whole of ICT. Talking about ICT now, 50,000 jobs were created in the first four years of my presidency. And then entering into the fifth year, the first half of this year alone, we generated almost 40,000 jobs. Doubling every year. Much of this is due to the momentum we built over the last few years. Now, we have a total of about 132,000 jobs in this sector, half the year is not yet done, very close to our target at 135,000 for the whole year of 2005.

Many of these jobs are being generated outside Metro Manila. Over the past 12 months call centers have been opened in Iloilo, Cagayan de Oro, Baguio City. BPO operations have sprung up in Legaspi City, Tacloban, Bacolod. Medical transcription centers have been established in Dumaguete, Davao, Naga. The concept of the cyber services corridor is gaining ground. Starting from Baguio in the north, with Cebu and Davao as hubs and going all the way to Zamboanga City. That's why I'm glad to see the Zamboanga delegation here. As highly paid as our call center agents are, they are actually the lowest paid in the whole totem pole of ICT. So there's jobs and high wages in all across the whole industry. And at the top of the totem pole another promising sector I am glad to have received the master plan earlier is the software development industry.

I'm glad to hear that aside from the 70,000 BPO agents, there are over 30,000 software developers in the country, and by the end of my term in 2010 we expect over a hundred thousand software developers.

There are more significant structural reforms in the pipeline. We see the need to empower our small and medium-sized businesses. And we're committed to assist SMEs become globally competitive through the partnership of the DTI and the commission on ICT, we have a framework that will enable ICT suppliers and vendors to provide the appropriate products and services to the small and medium enterprise market. The Philippines must be branded as the ICT outsourcing destination with excellent human resource, high quality and infrastructure that is low-cost with the broadband networks and the ease to do business with the government. I'd like to think we're truly back on the map of Asia and the world through our ICT. And the Philippines offers genuinely exciting opportunities for investment.

But, of course, phase two will have to be defined as well by bringing the benefits of the top economic reforms to the people. With more revenue we can invest more in vital social services to lift our poorest citizens out of poverty. Economic reform including your ICT investments must go hand in hand with social justice. We cannot have two Philippines -- one Philippines for the haves, one for the have nots. We must all have, not by shrinking the pie or taking from one group and giving to the other. We must expand opportunity and raise up all people, all the people to prosperity and dignity.

And because for us to be the global center for ICT and other investments you need ease of doing business. Phase two will continue the campaign to fight corruption. Corruption is a single biggest barrier to moving the nation forward. We're making significant strides in tax collection, prosecution of tax cases, investigations of government officials, customs reform.

In the first five months of our current campaign to enforce tax collection, the BIR has filed 21 tax evasion cases with the DOJ. The BIR is committed to filing at least one case per week through the end of the year. In addition, several public officials and employees from various departments and agencies including the BIR and the BOC have been dismissed for failing lifestyle checks.

I appointed Tony Kwok, the... who created and ran the independent commission against corruption until his retirement to help me make our fight against corruption in the Philippines more vigorous, hopefully as vigorous as what Hong Kong did in its seven year quest. Hong Kong was one of the most corrupt societies until the ICAC came in, after seven years it's now one of the most transparent societies. And we've been working to restore values education to the school system but it's not enough. And we have to attack it every single day relentlessly. All these efforts on the part of the government are matched by public monitoring from the coalition against corruption which is a multi-sector community-based organization comprised of representatives from the church, business and the broader society. With their active participation as they have done since the last Edsa, I'm proud to say that at no time in Philippine history has been such a broad based effort to cleanse the government.

You who are here as investors, movers and shakers whose support is required to generate the prosperity we need in the Philippines and to create jobs and reduce poverty, it's important that I have this straightforward conversation with you about the good news in our economy but also about our political environment because politics affects markets and investment decisions. For better or for worse actually, as I said earlier, there are two Philippines: one for the haves and one for the have nots. There's also the Philippines that works and the one that doesn't. As I said earlier, for the well-to-do and for the very poor. One of economic growth, one of high unemployment. One of a booming service sector fueled by ICT, one of subsistence farming, and the contrast go on. I want one Philippines. As I said earlier one Philippines that raises up the bottom not lowers the top. And I aim to do it by breaking the cycle of division, destructive politics, tax evasion and a backstabbing political environment which perpetuates the status quo.

And with your support I think I'm making good progress. As I was able to push congress to pass my revenue legislation, nobody likes to raise revenues, I did. And I have paid the political price for it. And compounding these decisions has been the soaring price of oil. The shock we got the other day of oil reaching unprecedented levels in its price which deeply impact on our poor. And that's why I would like to take this opportunity to ask Secretary Johnny Santos to take the lead to project all the initiatives and safety nets the government is putting in place because we must inject in the national consciousness the bigger picture of national survival. This oil shock is a matter of national survival and it is important that we address this as well. Because if we're able to work on the oil shock and we're able to work on phase two of the economic reforms then we'll be able to bring about sustainable growth and development. This is the most difficult time of our economy. It is because we have had to do phase one, the revenue measures, the power reforms. And now the oil shock that we have to contend with. This is the most difficult time and this is the time that we must all get together to help our republic survive.

It is no coincidence that my opponents came after me within days of completion of the first phase of my economic reform plan and within hours of our credit rating outlook upgrade. Its an age-old game in the Philippines. They've been doing it to me for four years where keeping the nation divided for political purposes has worked. We cannot make it work anymore. We must put a stop to it. We have Phase One done. We have Phase Two and all its promises. We have the challenge of the oil price shock. The challenges are daunting. It's not the time to bicker. It is time to unite and act as one in building a better future for our country and our people. And I thank the Cebu business community and I thank the ICT community for your leadership in this endeavor.

Daghan salamat kaninyong tanan.

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