INTRODUCTION
First of all, let me express my thanks to the sponsors of this roundtable conference: Salomon Brothers and NYNEX Corporation.

That NYNEX has joined Benpres Corporation in putting up large-scale telecommunications projects in the Philippines says a lot about the new environment for enterprise that now prevails in our country.

After decades of stagnation and a few false starts, we are up and running — much to the surprise of many of our erstwhile critics. We are now doing business with the rest of the world — starting with some of our oldest and most reliable friends here in the United States.
REFORM AND RESULTS
Those of you who have recently looked into our performance in the Philippines will have noted a clear and basic shift in the way we have positioned ourselves for sustained growth.

* We are dismantling monopolies, first in telecommunications which led to more foreign participants in the sector like NYNEX. As a result, telephone density improved from 71 people per phone in 1992 to 44 in 1995, or an increase of 61%.

* We opened up banking which had been closed to foreigners since 1948. Ten of the world’s largest foreign banks have now come in for branch banking, and more may still come in under different forms of foreign participation.

* Other sectors are now in various stages of liberalization — shipping, insurance, cement, even agricultural trading. The oil industry is now on its first stage of deregulation, and we expect to fully deregulate it by 1997.

* In aviation, at least two official carriers (PAL and Grandair) are allowed for international passage. There are now five new domestic airlines serving interisland passengers, too (Cebu Air, Starasia, Laoag Express, Air Philippines, Grandair).

* Wholesale trade has been opened to 100% foreign investments, and we expect legislation soon that will open up retail trade.

* In the mining sector, 100% foreign participation, long disallowed under old laws, is now possible through what are known as financial or technical agreements or FTAAs.

* We have the most liberal and innovative Build-Operate-Transfer (B-O-T) Law in the world — with over 10 variations which have attracted more and more private investors to participate in our infrastructure development program. This expanded B-O-T scheme enabled us to solve the power crisis, and now we seek to replicate it in other areas such as airports, seaports, tollways, land reclamation, water, waste management and other public utilities.

* And we offer multinational firms seeking a strategic gateway for their products and services to the markets of Asia-Pacific, ready-to-occupy factory locations in over 40 growth centers, industrial estates and export zones all over the country.

The potency of these reforms is already reflected in results. You probably know about last year’s macro-economic indicators; this year’s are even more encouraging.

In the first half this year, GNP growth was 5.2%, better than the 4.7% we chalked up in the same period last year. This puts us well on our way to achieving the targeted 6%-6.5% growth in real terms for 1995.

Significantly, this momentum is primarily being driven by a more open policy environment, exports and investments — with growth rates of 15.4% and 13.7% in the first half respectively. In august 1995, exports rose 31.2% on a year-to-year basis.

Investor confidence is at an all-time high. In this year’s first half, foreign project commitments approved by the Board of Investments (BOI) were up by 53%.

Total paid-up capital recorded by the Securities and Exchange Commission (SEC) was three times higher than the level for last year’s comparative period.

Manufacturing industry growth is rising steadily — with expansion last year at 6.1%, and as of the first semester this year at 7.9%.
THE CHALLENGE THAT REMAINS
Two years of expansion do not, of course, constitute a miracle. And a country is not modernized with one or two seasons of exertion.

Of these, we are aware.

Over the past three years, we have set the stage for economic take-off.

Over the next three years, we are ensuring that our development momentum is not only accelerated, but made sustainable through further economic liberalization and social reform.

We know full well what remains to be done in the economic and social arenas: to provide more jobs, upgrade skills, raise incomes, and spread resources more equitably across the board — all of these within a framework of democracy and free enterprise.

Many others had sought these same objectives for the Philippines before. But the big difference is that, this time, we are succeeding. We have turned attitudes, policies and habits around to achieve steady and enduring growth.
THE GROWTH CENTERS
The character of our new growth centers reflects this.

Two years ago, on my first official visit to the United States, we could only speak of our initiatives for the Subic Freeport and the Clark Special Export Zone, the erstwhile sites of the largest American military bases in Asia. Today, many other growth zones all over the country have become havens of investment and enterprise — and this is only the beginning.

The attractiveness of all these sites is the availability of an English-speaking, highly trainable workforce, whose productivity can be counted upon to keep any production venture competitive with the world’s best.

And lest you think that these are just generalities, we can cite the experience of united technologies which makes wiring harnesses for cars in Cebu’s Mactan Export Processing Zone.

According to George David, President of United Technologies International and Chairman of the U.S.-ASEAN Business Council in New York, Cebu is their only operation worldwide that has delivered 100% first-run capability performance for 100 consecutive days for auto wiring harnesses. Industry norms for first run capability, he explains, are typically in the 90% range and no one had approached 100% — until Cebu did it!

There are lower-cost labor countries elsewhere in Asia to be sure, but I submit there are none better than ours in the Philippines.

Moreover, the supervisory and managerial talent pool is deeper than in any other country in the region. Indeed, most have a serious shortage and employ today Filipino managers.
U.S. INVESTMENTS IN THE PHILIPPINES
All these, of course, are not unknown to many American companies — both those who have long been doing business in our country, and those who have lately come on board.

U.S. Investments in the Philippines today continue to hold a dominant share. This is not unexpected, given our long and historic relationship.

In addition to long-time friends such as Procter and Gamble, new firms like Texas Instruments, Timex and Intel have set up shop in the Philippines-and are expanding their operations.

Among the newest entrants is cypress, a hot shot in Silicon Valley. Indeed, one of the opportunity areas we see for further American investments in our country is electronics.

Aside from these areas, mining and agricultural processing should also be top draws.
Then, there are the various new public infrastructure projects available under the Expanded B-O-T Scheme. Already, we have seen significant U.S. investments in power and energy but there are many other avenues for more ventures.

As an engineer, I marvel at the efficiency of your roads and other transport infrastructure which make mobility in the United States almost second nature. An island country like ours needs innovative technology more than others, and offers areas of opportunity to those with transport technologies like yours.

The opening of service areas such as insurance, banking, travel and tourism bear looking into. The Federal Express regional hub in Subic means shorter lead times for moving raw material inputs in, and finished goods out to their destinations, with attendant cost-cutting and other efficiencies.

In other words: in the Philippines, we mean business.
CLOSING
Finally, let me say something here about the strategic significance of being in the Philippines with respect to your larger interests as a part of Asia-Pacific. We are centrally located in an intensively integrating regional market and operating under a democratic, free enterprise system.

And we are fully attuned to the culture of American business. The best thing to do would be to come over and see the facts, the realities, the reforms and the opportunities for yourselves.

We can do and achieve much good together: as you place investments that earn for you, you also enhance the welfare and progress of the Philippines.

A little faith in the Philippines will go a long, long way for our mutual benefit. This is all we need and ask from our friends in America.

Thank you and good day.