Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
Before the Philippine-American Chambers of Commerce, Asia Society, Carnegie Council and US-RP Business Committee

[Delivered in New York, New York, November 15, 1993]

The Philippines is back

THIS IS the third visit, in just seven years, that a Filipino President is making to America, so many of you have the right to wonder whether there is anything new that I can tell you about the Philippines.

Today I can report to you much more. I can speak here of a country back on its feet and of a people on the move. And since you are businessmen who have an abiding interest in economic prospects in our part of the world, I will urge you to put the Philippines back on your map—if before, you despaired and scratched us out.

A nation on the move

Were this merely my personal verdict, you would no doubt regard it as only to be expected from the No. 1 salesman of the Philippines. But it has also been said by others.

Analyzing our situation last April, the World Bank noted: “The Philippines now faces its best prospect for sustained development in almost two decades.”

The chairman of the Keidanren in Japan, Mr. Gaishi Hiraiwa, described it this way: “The Philippines is ready to leave the hospital and start jogging.”

Nothing in this suggests a major economic miracle. But considering how often our opportunities were squandered in the past, the change is significant. And considering how our people are now pulling together to meet the challenge of development, we are right to be upbeat about our national prospects today.

Already the major economic indicators point to a sustained economic recovery.

After an economic slowdown, engendered by a power shortage in the first semester, we witnessed during the second quarter a rise of 3.5 percent in the GNP.

Inflation is down to seven percent from 24 percent three years ago. Interest rates are at 11 percent, or about one-half their levels in 1991. The exchange rate is stable and is at a level that spurs exports. Gross international reserves were at an all-time high of $6.7 billion early this year.

Last year a restructuring package with commercial banks put to rest our problem with commercial debt. This year we re-entered the international capital market. Our initial bond issues were oversubscribed, confirming our credit-worthiness and international confidence in our future.

Year-long bull run

Our stock market is in the midst of a year-long bull run that has been adjudged among the strongest in the world. The market index has nearly doubled since January.

Foreign investments are on an uptrend. From January to September this year, $787 million in equity investments has been registered. Of this, 30 percent is from America and Japan.

In our expanding international trade, exports totaled $7.1 billion from January to August this year, while imports totaled $11 billion during the same period. The trade balance is still unfavorable, but we are looking at better years ahead, now that our industries are recovering their capacity and new ones are rising.

Some of you will wonder whether these are merely the signs of the same boom-and-bust cycle that has characterized our economy in the past. I believe it is self-sustaining because it is anchored on a comprehensive program of reform.

My Administration has adopted a five-point program of priorities that reflects our people’s foremost concerns—political stability, effective government, economic growth, social justice and environmental protection.

Political stability is paramount, because Philippine development has often been held hostage to political chaos and armed challenges to the Government. Today I can tell you that our democracy has never been more stable than it is now. My 16-month-old Presidency is living proof of our working democracy.

The other side of political stability

We are turning a corner in negotiating an honorable peace in the many conflicts that once imperilled our republic. Crime is on the wane as police services have been improved and strengthened by citizen action.

The other side of political stability is the progress we are making in establishing effective, democratic government. We are proving that our attachment to democratic institutions is no hindrance to effective government and economic modernization.

The Government is achieving more throughout the country by decentralizing the tasks of administration and giving our local communities more control over their affairs.

And it is spurring the economy by breaking up the old regime of monopolies and cartels, regulation and controls which are injurious to public interest.

We have set free the spirit of enterprise through a massive program of deregulation and privatization.

We have fully liberalized foreign-exchange transactions in the country and are fast eliminating the old policy of protecting our inefficient industries.

And, perhaps most interesting to most of you, we have passed a new foreign investment law that opens our economy further to foreign capital and liberalizes foreign participation in our economic development.

These are not mere policies on paper, but programs being rigorously carried out.

Neither are they scattered initiatives designed merely to show that my Government is doing something. They constitute a coherent program and strategy for national development.

The development plan we have adopted envisions a newly industrializing economy by the turn of the century.

Development targets

The plan has four major targets during my term 1993-98:

First, raising per-capita gross domestic product from U.S. $800-plus today to US$1,000 in 1998. Second, keeping inflation down to single-digit levels during the plan period. Third, elevating more than 70 percent of the Philippine population above the poverty line. And fourth, generating sustainable growth of investments and of exports of goods and services.

We project exports of goods and services to grow by an average of 15 percent annually during the plan period. We will diversify our manufactured exports to eliminate over-reliance on a few markets and products.

While we promote Philippine exports aggressively, we do not forget that we have a huge internal market of 65 million people.

Our people are our most productive and competitive resource. That is why the plan invests heavily in their training and their welfare. Our human resources development program is designed to make our highly literate and adaptable workforce second to none in the region. You do not need an interpreter to do business in the Philippines.

But we can certainly use a little help from our friends—of whom most Filipinos consider America to be first and best.

Our bilateral trade has expanded even more in recent years, from a total volume of only $2.5 billion in 1987 to $6.4 billion last year, exceeding all others. From January to August this year, Philippine exports to the U.S. have reached $2.7 billion, and our imports from you, $1.9 billion. We expect to surpass this year the levels of last year: $3.8 billion in exports and $2.6 billion in imports.

American investments in the Philippines are formidable. They are to be found in practically all aspects of economic life—in manufacturing, mining, power generation, oil exploration and refining, communications, banking, food processing, pharmaceuticals, insurance—you name it, American capital is there.

And it bears pointing out that these investments in my country have been fully profitable for American business over the years.

The examples are many. Citibank Manila is the most profitable Citibank branch in the world. Coca-Cola’s bottling plant just south of Manila is the company’s biggest in the world. Occidental Petroleum and Shell International are developing one of the largest oil and gas finds in Asia during the decade.

RP-US partnership

Though our economic relations are impressive, we can still do better. Certainly we must move—together—to expand our relationship and locate it on the higher ground of real partnership. The time when our relationship was founded on aid, on military bases and on American benevolence is over.

We should move to transform it now into one of mutual advantage, of complementarity—in trade, in investments, in technology, in human resources, in regional security.

Among our country’s prime investment sites today is Subic Bay. Where a major arsenal of the Free World once stood, there stands today a free port and economic zone, with the same magnificent harbor and airport. And it is rising on the strength of investments being made by investors from other lands, including Americans. The former Clark Air Base area is also being developed as a growth area for civilian use.

These two will stand as lasting monuments to our historic relationship. Out of these perimeters of freedom there will rise from our joint efforts a new economic bastion of partnership and cooperation.

It was your thirtieth President, Mr. Calvin Coolidge, who memorably remarked that “the business of America is business.” By that, I presume he meant to emphasize the no-nonsense pragmatism that built the biggest economy in the world.

Yet significantly, that was not the whole of what President Coolidge said. If I remember correctly, he also went on to say: “And the chief ideal of the American people is idealism.”

Business and idealism

In America’s historic commerce and contact with the world, there has always been a mixture of both—of pragmatism and idealism, of the search for both profit and honor. And this has marked the actions of both your government and your business community.

If American government has worked—at the expense of its treasury and the blood of its youth—to build peace and democracy in many parts of the world, so have you in American business helped to build progress and a better life in many countries.

In the new world that is coming to be—in the challenge of development in our time—the same opportunities are again at hand.

Today, when the multinational company has ceased to be the bogeyman of economic nationalists, when a truly global market has arisen, I think it unlikely that American business will retreat toward home.

Rather, it will seek to create linkages, alliances, joint ventures, partnerships and growth triangles with its counterparts in other lands, striving to build the future with them.

You have, if you choose, a historic role to play in what we are building in the Philippines today. You can participate in the determined effort of a staunch ally and friend to catch up and modernize during this final decade of the century.