Address
of
His Excellency Fidel V. Ramos
President of the Philippines
At the 10th International General Meeting, Pacific Economic Cooperation Council
Delivered in Kuala Lumpur, Malaysia, March 22, 1994]

The new Philippines
in the Asia-Pacific era

I. A NATION REBORN

TO EAST ASIA’S VIGOROUS ECONOMIES, my country is like a friend and neighbor who has been ill—but now is well once again.

Long periods of calamities and political crises before 1992 have tested our fortitude as a people. Today—hardened in the fire of adversity—we Filipinos can look to the future confidently.

We have put our house in order; and we’re back in business at the heart of the world’s fastest-growing region.

Once again we’re ready to pull our weight in regional cooperation—and to account for ourselves in the world.

Our sense of purpose regained

Best of all, we Filipinos have regained our national sense of purpose.

We have come to grips with our most intractable problems, and we can justifiably claim that we have arrested the decline of the economy—and the national spirit—which had so demoralized our people.

We are agreed on an economic vision for our country; and we have reached a national consensus on the structural reforms to make that vision of “Philippines 2000” a reality.

Henceforth, we will so conduct ourselves that—six years from now—our friends and neighbors can say of us—in the words of the Malay proverb: Anak kucing menjadi harimau. (“A kitten has become a tiger”)

The renewed sense of optimism that pervades our business people is confirmed by the well-known investment house, Merrill Lynch:

The Philippines has experienced steady progress in all its debt and debt-service ratios over the past few years. Full payments are currently being made to the Paris Club . . . . . Power shortages have been reduced dramatically and should be eliminated in 1994.

With President Ramos, the Philippines has achieved a high degree of political stability for the first time in nearly a decade.

An appropriate exchange level is again making exports competitive, particularly many manufactured goods. Foreign direct investment is increasing sharply and the stock market is at record levels.

Economy poised for takeoff

That the economy is poised for takeoff, we can see from the heights reached by our equity market (up by 155% in 1993 over 1992); the dramatic rise in foreign investments (49.6%) and export receipts (12.8%); our successful return to the capital markets; the stability of prices; and the decline of interest rates.

Our debt-service ratio has declined from 37% of export earnings in 1984 to only 18% in 1992—lower than that of any Latin-American country.

Between 1990 and 1992, our public-sector deficit dropped from 5.3% of GDP to 1.9%. In 1993, inflation was down to 7.6%.

We are steadily opening our economy to foreign investment; and leveling the playing field of competition by dismantling cartels and monopolies injurious to the public interest.

In our quest for internal stability, we have broken through every barrier. With local secessionists, military rebels and Communist insurgents, we are negotiating a just and enduring peace.

A new spirit of cooperation between Congress and the Presidency prevents the gridlock which has obstructed policymaking in our far-from-perfect democracy.

We’re streamlining the sluggish bureaucracy, devolving political authority to Local Government units, developing 15 growth centers throughout our archipelago and installing effective central government in Metro Manila.

In all this effort, we’ve received much help from our friends. Initial investments from our ASEAN neighbors were veritable votes of confidence in our economic recovery.

Investments from Japan were up 65% in 1993; South Korea, Hong Kong, Taiwan, China, Saudi Arabia and Australia have all come in. So have the finest Asia-Pacific corporations—among them Hopewell Holdings, Sime Darby, Keppel, Neptune Orient, Singapore Telecom; Daewoo, Samsung, Tuntex Hyundai; Nissan, Marubeni, Mitsubishi, Kawasaki, Mitsui, Toyota, Matsushita, Kao; and, from the farther shores of the Pacific, Federal Express, Coastal Petroleum, Motorola, Unocal, Reebok.

They’ve all cast their votes of confidence in the new Philippines.

Growth targets for Philippines 2000

How will the Philippine economy compare with the East Asian tiger-economies over the next few years?

We expect the economy to grow by 4.5%—or perhaps a bit more—this year. This may be modest by regional standards; but it is respectable in world terms—and to us tremendously gratifying after years of minimal growth. The growth our economic managers project for 1995—7.5%—will be closer to the East Asian norm.

Between 1993 and 1998, we envision our economy to expand by an average 6-8%; income per head to rise to at least US$1000; and poverty incidence to decline to about 30% from the present 50%.

We shall need no special favors from our business friends in the Asia-Pacific. We ask only that you look squarely at the opportunities for trade and investment we offer.

II. THE PHILIPPINES IN THE ASIA-PACIFIC

I have sketched for you the travails of a nation that has— over these few years—been virtually reborn. Let me now turn to my country’s concept of its role in the Asia-Pacific community.

Today, we Filipinos regard our membership in ASEAN as our primary foreign commitment—and the larger Asia-Pacific region as the cornerstone of our foreign relations.

We subscribe wholeheartedly to the ASEAN ideal of open regionalism.

For the first time, the world has a real chance to remove the threat of force from international relations; and to achieve unprecedented—and collective—prosperity.

For the first time, the world has the chance to build mutual security and stability not on arms or military alliances but on interdependent economies.

For the first time, a truly global market is forming—a market founded not on force but on mutual benefit.

This Council should add its voice to those who urge the world’s leaders to stop thinking in terms of power and advantage—and to begin thinking instead of peaceful commerce and integration into the community of nations.

Closed trading blocs will not work

We in the Philippines see APEC and AFTA not as our countervailing forces in a post-Cold War economic balance of power but as building blocks of the global market.

Closed trading blocs will not work—because no bloc can have, within its boundaries, all the markets, raw materials, energy and technology—much less all the intelligence and talent—that human societies need for self-sustaining growth.

Closed trading blocs will function like the old empires.

Economic differences between them can easily deteriorate into political disputes and military conflicts.

We also need to redefine our concept of nationalism.

Technology and economics are outpacing our accustomed ways of thinking about international politics. Orthodox geopolitical maps no longer coincide with the new map of the world that business and economics are charting.

We in the Philippines were left behind East Asia’s growth because we mistakenly tried to protect our industries from foreign competition.

We mistakenly equated nationalism with economic self-sufficiency.

Now we are painfully—and belatedly—removing the barriers erected against foreign investment and multinational industry.

We’ve also redefined our concept of national security in nonmilitary terms. We now regard national security as founded—ultimately—on our country’s economic strength, its political unity and its social cohesion.

Our concept of security is to seek security together with our neighbor countries and not against them—together to build not mutual deterrence but mutual support and confidence.

Communitarian capitalism

We acknowledge the power of self-interest in generating development. But we also insist that self-interest must be mitigated by a sense of community.

“Free enterprise” should not mean enterprise free of public accountability. Free enterprise should not mean free exploitation of the environment. Free enterprise should not mean the poor and powerless paying the human costs of development.

Apart from the classical Anglo-Saxon model of the individualistic risk-taker in the liberal democracy, we now have the contrary model of a more communitarian capitalism practiced in East Asia and in many parts of Europe.

Socially, communitarian capitalism has a greater care for those groups—the poor, the young, the handicapped and the old—whom competition leaves behind. Rather than depending on money incentives for productivity, it favors income equity, consensual relationship and intrinsic work satisfaction.

Communitarian capitalism has been able to combine economic vigor, growth and competitiveness with social harmony.

It is to this communitarian model of modernization we in the Philippines aspire—because we see it as closer than individualism to the traditional civic virtues we want to keep; and the kind of social responsibility we want to inculcate in our businessmen, officials and professional people.

Toward an Asia-Pacific economic community

Let me now sketch for you my vision of the Asia-Pacific region.

We in the Philippines believe our ultimate goal must be an Asia-Pacific economic community. For only then can this Ocean we share live up to its name.

Within Southeast Asia, unification will give our 450 million people the cultural variety, the talent pool and the economic weight enough to count in the future world.

If it is to get anywhere, economic unification must begin—not in some grandiose political scheme—but in organic and practical ways, following the grain of custom.

It should not compete with national sovereignties and identities. But it must equip itself with a framework for interregional trade and mechanisms for regular consultations; for resolving internal disputes, and for resisting outside encroachments.

And the groundwork must begin in our time.

Though I speak so optimistically of our prospects for solidarity and mutual support, I do not make light of the problems that set us apart.

Some of these problems are centuries old. They cannot be wished away. But neither can regional cooperation wait on their resolution.

Our predecessors in ASEAN were wise to transcend these bilateral problems and to proceed with the initial stages of regional cooperation without first resolving them.

Modernization and economic growth will make many of our problems irrelevant—no matter how large they may loom in our calculations for the moment.

Beyond economic growth

No region of the world has used its peace dividend from the thawing of the Cold War more wisely than East Asia. According to the latest figures from the Economic and Social Commission for Asia and the Pacific in Bangkok, the region has just had another banner year. It grew six times faster than the global economy did in 1993.

Regional stability—which is the foundation of East Asia’s amazing growth—is built on the emergence region wide of a market system, and the recognition by all our countries of the need for regional peace, if internal development is to continue.

East Asia’s early unity, in the fourteenth century, was formed by the driving force of economics—specifically by the East-West spice trade. Economics can unify us once again.

Growth poles—like the East ASEAN Growth Area grouping Mindanao, Brunei, eastern Indonesia and East Malaysia—are teaching our local peoples the virtues of working together. And interregional trade binds our countries all the way from Russia’s Far East and Japan to Australia and New Zealand.

Toward greater freedom

Now to sum up: There are those who say Asia is not going to be civilized after the methods of the West—that Asians will prefer to be ruled by authoritarians who make the economy grow rather than by democrats who can’t say “no” to special interests.

But this kind of cultural relativism is being refuted by middle-class activism from Beijing to Yangon.

Everywhere in East Asia, people are giving up their tranquility—and sometimes staking their liberty—in the belief that there is something more to life than an unending spiral of individual gratification.

All our countries seek economic growth—not merely because it allows consumers to accumulate material goods—but because it frees societies from the limiting belief that humankind must forever live by the sweat of its brow.

Economic growth is important because it allows greater human freedom. Economic growth is important because it enables human beings to realize the full possibilities of their lives.

This is what we all need to keep in mind—as we struggle to free the masses of our peoples from their bondage to poverty. It is for this—for greater human freedom—that we are striving; and not just for ourselves but for those who will come after us.