INTRODUCTION
First, I would like to welcome our special guests, the representatives of ordinary Filipinos, the basic sectors, as well as the captains of Philippine business, to this special ceremony.

We of the legislative and executive branches, have desired your presence not only in the expanded Legislative-Executive Development Advisory Council (LEDAC) meeting but also when we sign these bills because of the importance of your participation in making these new laws contribute fully to our economic and social reform agenda.
LIBERALIZING INVESTMENT HOUSES
The amendments to the 1973 Investment Houses Law which is now RA 8366 reconfirms our intent to liberalize and deregulate our industries in the face of stronger global competition and our need to attract our fair share of investors in development financing.

This law addresses important aspects to improve the competitiveness of our financial sector. Its most obvious effect is that the new maximum limit of 60% for foreign equity participation in investment houses will encourage more foreign capital in the establishment and operation of mutual fund investments in our country. The new funds flowing in because of this new law can then be utilized here to finance our various growth projects and Social Reform Agenda.

Furthermore, by eliminating the requirement that all directors of an investment house must be Filipino citizens, we provide more guarantees to foreign investors that they have a free hand in determining where they can best use their funds for maximum profitability. This law, therefore, sets the tone for a win-win situation whereby fresh capital may be infused into important Philippine projects while the investors themselves are assured of a fair share of profits.

This law enables us to find a new source of foreign exchange outside of the traditional sources provided by our overseas workers, our exports and investments in other sectors. For the short term, it allows us to beef up our precarious supply of foreign exchange in these critical times. But more importantly, this law signals to the world that our deregulated financial sector is set to compete in the coming century.

This new law also aims to strengthen investor protection against fly-by-night companies by increasing the minimum paid-in capital requirement from p20 million to p300 million. This allows our investment houses to operate at a stronger, more stable level and therefore ward off possible adverse impacts that occur from time to time.
TAPPING THE POTENTIAL OF SAVINGS AND LOAN ASSOCIATIONS
On the other hand, RA 8367 regulates the organization and operation of non-stock savings and loan associations (NSSLAs) to make them more efficient. Savings and loans associations have long been with us and have been a ready source of emergency loans to many needy Filipinos, who, otherwise, had no access to ready credit.

But the potentials of NSSLAs as a source of new capital and a means of educating people in savings and thrift have not been well tapped.

Also, some NSSLAs, being very small-scale operations and generally left unsupervised, have been ill-managed, and the misfortune of these NSSLAs has become reason enough for some members to stop supporting them.

This new law that authorizes the monetary board of the Bangko Sentral ng Pilipinas (BSP) to have direct control and supervision over the establishment of NSSLAs and prohibits lending to non-members will protect NSSLA members from the unscrupulous practices of some officers.

With the protection the law offers to members, we hope to encourage the formation of new NSSLAs in both private and government offices and among other interest groups and eventually start a culture of thrift and savings among our salaried workforce.
INCREASING OUR SAVINGS RATE
I would like to see the proliferation of more savings and loan associations, and I call on the leaders of industry present here to encourage their employees to practice thrift and saving through these associations.

It is unfortunate that our country ranks lowest among the ASEAN nations in terms of savings. Our current savings rate of 19% of our gross national product (GNP) is far behind Malaysia’s or Indonesia’s over 30%. Even the World Economic Forum (WEF) which I addressed last week noted our need to improve our savings rate to remain competitive in ASEAN.

Given our low savings, our banks’ collective ability to provide credit has been restricted such that the total bank credit-to-GDP ratio is less than 50% of our gross domestic product (GDP) whereas our ASEAN neighbors enjoy a bank credit-to-GDP ratio of about 90%.

A more competitive financial sector will lead to lower costs and lending margins, more intensive underwriting activities, diversification of financial products offered in the market, broader geographical and sectoral coverage and more outward-oriented outlook for the industry.

A high saving rate translates into more money made available for development and livelihood opportunities. Simply put, the limited amount in our country of domestically-sourced funds being circulated to fund our countrymen’s livelihood and other projects has hampered the pace of our growth.

But we aim to correct this profligacy soon. We are targeting 35% of GDP as our savings rate by the year 2000. Among the measures established to attain this are the creation of the National Commission on Savings and the Proclamation of the period from October 1, 1997 to September 30, 1998 as Savings Consciousness Year. RA 8367 is among our important moves to pump-prime our economy through domestic sources.

In these times when foreign financial sources are temporarily slowing down in response to the erratic movements of Southeast Asia’s foreign exchange rates, we need all the more to look to the domestic front for sources of our capital funds. I am confident, however, that with the continued cooperation of all branches of government and between government and the private sector, we can find adequate sources to sustain our growth.
CLOSING
These two new laws are among the best welcome-home gifts I have ever received from congress. In tomorrow’s news, the details of these two new laws will be discussed and our people will understand their importance. But what our public should know further is that, beyond the provisions of each of these laws lies the greater significance: that the collaboration between congress and the executive branch remains strong particularly in these times when working together is most crucial.

I thank Senate President Ernesto Maceda and Speaker Jose de Venecia, the principal authors and co-authors, the sponsors and co-sponsors, the members of the bicameral committees involved in their preparation — from both houses of congress — for recognizing the urgency of these laws.

I know that these two bills are only indicative of what other bills will be signed into law. Today, we have legislation to support our financial reforms. Very soon, we will have the other important measures that will further our Social Reform Agenda (SRA). I would like congress to know that I look forward to signing the laws on the children’s courts, ancestral domain, anti-squatting and very especially the Comprehensive Tax Reform Package (CTRP).

Maraming salamat muli. I hope to see all of you again in the next signing ceremonies.