Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
At the launching of the Pre-APEC 1997 Folio “Philippine Initiatives in Vancouver”

[Delivered in Malacañang, Manila, November 10, 1997]

Our blueprint
for Vancouver

WITH THE APPROACH of the next Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting in Vancouver, I am delighted at this opportunity to share with you our ideas about what the Philippines hopes to achieve at that forum.

The Philippines has been firmly committed to the APEC process of building a community in the Asia-Pacific region based on free and open trade and investments.

In the eye of the storm

We want to continue freeing the spirit of Filipino enterprise from decades of overregulation, and open to our industries the wide world of global information, technology and competition.

However, all the Vancouver summiteers are keenly aware that they will be meeting in the eye of the economic storm that we—among many other countries in the Asia-Pacific and other regions—have been going through these past four months.

At the outset, let me say that I have no doubts whatsoever that we will weather this storm, perhaps better and sooner than our neighbors, and that my optimism is shared by many independent observers.

Nonetheless, the currency situation has raised many concerns and questions that will certainly be raised again at Vancouver. Some pessimists have been quick to call it the “unraveling” of the so-called East Asian economic miracle.

Has the period of high growth for East Asian economies indeed come to an end? My quick and blunt answer is “no.” In my remarks before the World Economic Forum in Hong Kong last month, I pointed out that the economic fundamentals of the countries in the region remain strong.

I also observed that the security underpinning of regional stability remains in place and, in fact, is bolstered by growing economic interdependence within the region. Opportunities remain open for the countries in the region to catch up with the more advance nations.

No stranger to hard times

The Philippines, of course, is no stranger to difficult times. We have endured situations and dangers far worse than the difficulties we now encounter. And even in the midst of crises such as those following the oil price hikes of the 1970s and the assassination of Ninoy Aquino in 1983, we did not step back from carrying out urgent and sweeping reforms needed to stabilize and strengthen our economic, social and political life.

The foreign debt burden that had long weighed down our growth has since been significantly lightened. We lifted controls on interest rates, prices, wages and foreign-exchange rates. We returned to the private sector those enterprises that were properly theirs to run, and restored their status as the main agent of economic change.

We dismantled the monopolies in key sectors of the economy. We removed quantitative restrictions on imports. We opened up the economy to foreign investors, and started the process of removing or at least lowering tariff rates. We also rehabilitated the banking system and cleaned up the books of the former Central Bank, the Development Bank of the Philippines and the Philippine National Bank.

Discarding failed policies of the past

And in the last five years, we have seen the economy grow as we committed ourselves to liberalization and deregulation, and carried out a more intensive tariff-reduction program. We took measures to discard the failed inward-looking policies of the past and to allow effective ways for people to pull themselves up from poverty through their own individual and collective efforts; through their productive participation in the economy; and through equitable sharing in the fruits of its growth.

Indeed, though growth may now slow down for a while, we are far from being in an intractable crisis. If anything, our current difficulties serve as a useful wake-up call for us to see those fundamental aspects of our economy that need to be strengthened. The troubles of the last few months have provoked a reexamination of policies that left us vulnerable to the contagion now infecting the region.

On the home front, we will work, with ever greater zeal, to firm up our economic fundamentals. We will strengthen coordination between our fiscal and monetary operations so closely that they will reinforce one another to ensure economic and price stability.

We are reviewing regulations in the financial sector to adopt more prudent financial policies based on the disclosure and transparency. We will continue to pursue liberalization in banking and other financial services but with the proper phasing and sequencing. The present currency situation will not deter us from our effort to pole-vault the Philippines into becoming a competitive financial center in this part of the world.

A cooperative response

Even as we seek improvements as quickly as possible, we cannot forget that we are facing a regionwide problem that has affected principally the members of ASEAN. ASEAN has been one in absorbing the impact of this currency turmoil, and so ASEAN must be one in solving this problem.

This recourse to cooperative response is nothing new to ASEAN. If regional cooperation is needed to solve this regional problem, then the Philippines, as ASEAN chairman, will take the lead in securing that cooperation.

The first promising steps to strengthen macroeconomic fundamentals are being taken. They must be sustained. Individual, domestic policies, however, will not fully deal with the region’s problems. ASEAN economies are sufficiently integrated as to be taken together as one, and ASEAN economies must work and collaborate closely with one another on this problem. It is in the interest of our economies, in ASEAN as well as in APEC and in the wider international community, to see a rapid restoration of financial stability in the region.

Thus I intend to raise, in the Economic Leaders’ Meeting in Vancouver, a call for much closer integration in monitoring, in promoting sound practices to reinforce our macroeconomic fundamentals, in supervising the banking system, in developing the capital market, in improving transparency and in properly phasing in reforms so that they are in step with the deregulation and internationalization of financial markets.

I also intend to raise the issue of an APEC endorsement for developing a financing mechanism that would augment IMF funds in the region. This would assure economies of the availability of financing as they pursue needed reforms and adjustment measures in conjunction with the IMF. It would institutionalize what in fact many APEC economies have done for Indonesia and Thailand.

These constitute clear substantiation of the framework principles we adopted in Manila in strengthening economic cooperation and development.

Completing a Financial Services Agreement

Last year the economic leaders gave a substantial boost to the World Trade Organization (WTO) by giving their strong endorsement to an Information Technology Agreement. This year the leaders will have another opportunity to push for the completion of a Financial Services Agreement under the WTO by December.

I shall propose in Vancouver that economic leaders endorse the conclusion of the negotiations of the Financial Services Agreement.

In view of the unprecedented number of submissions from various APEC economies for sectoral liberalization, I will bring up with the other economic leaders the desirability of committing ourselves to working on two to three sectoral liberalization agreements, preferably under the WTO, in the next two to three years. This gives us more opportunities for taking full advantage of the markets opening up all around us.

We will also call for a formal review of APEC’s progress by 1999, the tenth year of APEC. We expect this to give impetus to the implementation of the Manila Action Plan for APEC of 1996 (MAPA ’96). I also intend to recommend to the other APEC economic leaders the prospect if inviting all the other members of the WTO to adopt the Bogor ideal of free and open trade and investments by 2010 for developed economies, and 2020, for developing ones.

Reorienting our enterprises to the world market

We must exert efforts to implement as much of MAPA ’96 as quickly as possible. We are onstream in carrying out our tariff reform program by bringing down for example, the simple average tariff from around 15 percent in 1996 to 12 percent in 1997.

We are committed to enhancing our Individual Action Plan to sustain the MAPA ’96, which bears our name. We have made new commitments in services, in standards and conformance, and in customs procedure. Much remains to be done to expand liberalization, and we will keep on improving our Individual Action Plan to enhance Philippine competitiveness as we move forward our Bogor goals.

APEC gives us the opportunity to reorient Filipino enterprises to the large global market. We have a long way to go toward creating a market economy that is truly free. These are steps that we should take to throw away once and for all the baggage of protectionism, of false nationalism and of inward-looking policies that have merely perpetuated our poverty.

Economic and technical cooperation

Our third area of initiatives will be economic and technical cooperation. We wish to place this third pillar of APEC on a par with trade and investment liberalization and facilitation. The importance of eco-tech activities in the financial sector has already been noted.

We will need to push for greater effectiveness and efficiency in economic and technical cooperation so that complementary and mutual reinforcing linkages are actively promoted. This means bringing those principles down to programs for actual implementation.

In line with the Canadian Prime Minister’s desire to engage the women and the youth fully in APEC, I have offered to host the ministerial meeting on women’s concerns in 1998.

Now to sum up and conclude: APEC trade and investments, complemented by economic and technical cooperation, are only the means to a higher goal. Growth and development are what we are after, with prosperity and progress in the Philippines as the final goals.

The key, however, is to ensure that progress is sustained. We advanced the APEC process further last year in Manila and Subic. As past chairman of APEC, I intend to support the efforts of Chairman Prime Minister Chrétien in Vancouver.

Working together as ‘Tem Philippines’

The folio “Philippine Initiatives in Vancouver” provides us with valuable contributions as we pursue the Philippine agenda at APEC, and rest assured that I will study its insights and recommendations very carefully with a strategic eye.

As Filipinos, we are challenged to work more closely as “Team Philippines” in pushing APEC forward, and in promoting a wider and deeper consciousness among our people of APEC and of our role in regional affairs.