Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
At the book launching of Facing the Asia-Pacific Challenge and launching of the Network for International Competitiveness

[Delivered at the New World Hotel, Makati City, August 28, 1995]

Freeing the spirit of
Filipino enterprise

I AM GREATLY DELIGHTED to be here—so that I can thank all of you who have actively supported our economic reforms these past three years.

We cannot yet claim victory for all our efforts. But already we are seeing their first fruits—in the unmistakable signs of our country’s resurgence. We have begun to free the spirit of Filipino enterprise from 40 years of overregulation—and opened to our industries the wide world of global information, technology and competition.

But there are still many things we need to do—together.

Failed policies continue to affect us

The failed policies of the past still affect our lives—thousands of our people still leave to look for precarious livelihood abroad.

Millions of our farmers and agricultural workers—and their families—continue to live from hand to mouth.

Why are we in this condition—when we Filipinos are supposed to be the finest workers and managers in Asia-Pacific?

Why are we in this condition—when our talent and creativity are the envy of our neighbors?

Why are we in this condition—when a tremendous reservoir of energy lies at the heart of national society—energy that powers a vigorous underground economy and the patient toil of everyday people all over the archipelago?

Why have we failed to transform this latent energy, this God-given talent, these splendid blessings of nature all around us into an irresistible force to burst our chains of poverty?

Protectionism has stifled enterprise

The answer is that we have stifled competition and enterprise—by allowing monopolies and cartels to dominate key sectors of the economy.

Some may ask: what do these policies have to do with poverty? The answer is that whenever we place artificial barriers to competition, we tilt the playing field in favor of somebody. And whenever we favor somebody, there is somebody else we must disfavor—somebody else who must pay the costs of the privileges awarded to the favored few.

And when politics—but not markets—decide whom to favor or to prejudice, then those who end up paying the costs are always the poor and the politically powerless—farmers, fishermen, small entrepreneurs; the labor-intensive businesses; and people’s cooperatives.

These are the workpeople and the enterprises at the grassroots of society that Government should have favored a long time ago. Instead, Government’s policies in the past favored a few large-scale, capital-intensive and urban-based industries—globally uncompetitive companies that have enjoyed monopoly rents and benefits from their dominance of key sectors of the economy.

Profiteers from the protectionist regime

There are still others—even more undeserving—who profited from the protectionist regime these past 40 years. High tariffs on imports made smuggling highly profitable for the clever and well-connected. And the wide discretionary powers public officials had over the fates of industries and business sectors and even tax payments made corruption even more doable and profitable—for both corruptor and corruptee.

Not competitiveness—not talent—not hard work—but political connections and criminal prowess became the main determinants of economic success. In short, the heavy hand of Government made the entire traditional economy a prize of the political spoils system and an object of patronage.

Nationalism in the age of global trade

And why did we make these mistakes?

The short answer is that we mistook shortsightedness for nationalism.

In the 1950s and 1960s we reserved the economy for Filipinos. We closed our economy—looking inward to our small home market instead of outward to the large global market. We followed the same path that led many countries in Latin America, Eastern Europe and Africa to economic ruin— and we achieved precisely the same results.

While we protected our “infant industries” which continued as so-called infants for 40 years, our Asian neighbors exposed theirs to global competition. And competition so toughened them that they were soon penetrating the markets of Europe and North America.

Belatedly we have now seen that protectionism misuses “nationalism”—which in this sense is a narrow, blinded kind of nationalism—for the benefit of a privileged few—and at the expense of the many.

Today we must view “nationalism” in a much broader dimension, in the same way that the majority of regional and global players view it for their national benefit. I say that we must always make integral to Philippine nationalism the spirit of self-confidence in facing up to world competition—in measuring ourselves against the best in the world.

Today’s nationalism leads us to expand our foreign linkages—the better to have access to global information, capital, marketing channels, and inputs of the best quality and services at the lowest costs. Only in this way can Filipino enterprises prosper in the new global trading order.

By now the consensus is almost universal that the market and market forces are our best weapons in waging our war against poverty This much we have learned from our Asian neighbors. This much we have learned from the disasters of Communist central planning.

The most effective way for people to pull themselves up from poverty is through their own individual and collective efforts—through their effective participation in the economy and through equitable sharing of the fruits of growth.

Harnessing the power of the market

For us, that means creating a market economy that is truly free.

We have done much during the last three years to achieve this goal of a truly liberated economy. We have deregulated its key sectors—telecommunications, insurance, shipping, transportation, banking and finance—and liberated components of other important industries—power generation, water supply and steel manufacture.

We have removed the obstacles to foreign investments, and continue to do so. Most recently, we have begun to dismantle the tayo-tayo (“we-we”) protective system that had burdened our farmers, exporters, food processors, consumers and many downstream industries for years.

It is because of these—and our efforts to bring down inflation and the cost of capital, to open up infrastructure bottlenecks, and to ensure political stability—that our economy is now moving steadily along the path of growth.

And increased competition has not led to the collapse of Filipino firms. Instead liberalization and deregulation have challenged our corporate giants to shape up; to widen their horizons; to become themselves regional and global players.

The tasks ahead

We have accomplished much. But we need to do a great deal more. We must complete reorienting our economy—to take full advantage of the markets opening up all around us.

We need to work double and triple time—because more than half of all our people still await their liberation from poverty. They have waited too long and endured too much.

This is why I am not inclined to sympathize with those who counsel us to go slow—to those who say we should give long-protected industries more time to adjust to competition.

Over these past three years, we have built the platform for our economic takeoff. Over these next three years, we must broaden the base of participation in the economy—and ensure that all who take part in it share equitably in its fruits.

This is why we are paying special attention to the growth of small- and medium-scale enterprises; to agriculture and agriculture-based industries; and to all those other industries that will create the greatest number of jobs where jobs are most needed.

These are the enterprises that will lift up the common life. These are the enterprises that will harness the energies sleeping at the grassroots of Philippine society. These are the economic endeavors that will bring us to our shared vision of “Philippines 2000.”

Responding to the demands of enterprises

We need to do many things. But the most important task is to complete reorienting our minds and mobilizing our people’s energies to the demands of twenty-first-century enterprise—and the age of the global market.

Those who oppose our reforms—those who try to slow our reforms down—these are cave-people still living in the economic Stone Age. Some of them still regard multinational industry and foreign investment as ideologically forbidden—when even China and Vietnam are aggressively competing for foreign partners to link their economies to the world market!

We must throw away once and for all the baggage of protectionism, of false nationalism, of inward-looking policies that have merely perpetuated our poverty. And we must abandon the defeatist attitude that we cannot compete with foreigners—even in our own home market.

Economic reform in a democratic setting

Three years ago, there were those among us who said democracy would fail in this country—that we need a dictatorship—if we are to straighten out our recalcitrant society and move it to the path of progress.

Now I think we have sufficiently proved the skeptics wrong. We have proved there is a kinder and gentler alternative to authoritarianism—a democratic way—to economic growth and social development.

But we must remember we are still only halfway through the process. Yes—if we stopped right here, our economy would probably continue to grow at 5-6 percent over the next few years. But it is more than merely growth we are after.

We want the millions of our people who have been living in poverty to rise up now, to win back the control over their lives that the failed policies of the past had taken away from them.

We want to give our marginalized countrymen the chance to free themselves—through their own hard work and their native talent—from their age-old bondage.

I am pleased to see gathered here our leading institutions and organizations—representing a wide array of sectors—summoned by a shared vision and a common purpose.

I am happy to see the Center for Research and Communication—with Dr. Esteban, Dr. Estanislao and Dr. Parreñas here—and I congratulate you for founding the University of Asia and the Pacific.

I am also pleased to note the participation of scholars from the Asian Institute of Management, the Philippine Institute of Development Studies, and the University of the Philippines School of Economics—as well as top people from the Management Association of the Philippines, the Philippine Chamber of Commerce and Industry, the Makati Business Club, the Federation of Filipino-Chinese Chambers of Commerce and Industry, and our country’s most competitive corporations—in the conference that produced this book, Facing the Asia-Pacific Challenge.

Your effort to shape a secure place and an active role for our country in the Asia-Pacific community manifests a new way of thinking, planning and acting sorely needed in the whole of national society.

Blazing the trail to prosperity

I see your initiative to make that vision a reality—through the network for international competitiveness—as a proof of the vigor and creativeness of our democracy.

I regard your initiative as an eloquent show of unity— among diverse individuals and institutions—to attain our aspirations as a people.

Let me now challenge you to take up the lead in accelerating our economic and social reforms. Let me challenge you to blaze a trail to prosperity that will be sustainable—to kindle the spark of solidarity and teamwork—among all our people.

Let me challenge you to dedicate all your time, your talent and your energy—to this crusade we have begun—to win for our people the good society they deserve—and for our nation to regain a respected and enhanced position in the world community.