Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
During the Greater Houston Partnership Luncheon
[Delivered in Houston, Texas, U.S.A., November 18, 1993]
We are partners and friends
FOR THE PAST nine years, we have been traveling through America—from city to city—and everywhere we have gone, we have been received with great hospitality and kindness. This is especially true in Texas.
Of Houston, it has been cheerily observed by one of your own—the late Marvin Hurley—that it was built in “the most inhospitable place to start a city that anyone could have found”—a mosquito-infested, muddy tract of land on buffalo bayou.
Today, who remembers Houston as once a bayou town? Today, to talk of Houston is to speak of phenomenal growth and energy—of human energy, beef and oil energy. As a famous Texas publisher once put it—”growing, growing, growing—that is Houston.”
Historical affinities
And behind this growth is an unrivalled sense of enterprise, a pro-business attitude.
In coming here today, we seek your trade and investment. But we hope to learn even more from your experience and your dynamism.
In many ways, what we are facing today in the Philippines parallels what the American South also had to face in its journey to progress.
Just as you transformed a largely rural economy into a modem one, so must we transform our predominantly agricultural country into an industrialized one supported by modernized agriculture.
Fortunately, we are undertaking this effort at a time of great promise and growing cooperation in the Asia-Pacific—at a time when East meets West in the APEC leaders’ summit hosted by President Bill Clinton in Seattle.
A vital ingredient in this ferment of growth and cooperation has been the rapid rise of Asia’s economies, and Asia’s success in dousing the fires of regional conflicts and insurgencies.
In our time, economic interdependence binds separate nation-states together and reconciles even the most bitter enemies.
Open regionalism
Economic competition is not a zero-sum game in which one side wins what the other side loses. In economic competition, everybody wins, and even the relative loser ends up richer than when he started.
This upturn in Asian affairs is among the significant new realities in international life today.
A truly global market has risen, and it is founded not on force but on mutual benefit, AFTA in ASEAN and NAFTA in America are paving the way.
We in ASEAN have gotten together to achieve a kind of cohesion that would give our six countries that cultural variety, the talent pool, the economic weight, the technological resilience and the attractiveness to investors that we need to become a major player in the future world.
But we in ASEAN do not see the globe as divided into friends and foes. We do not see business competition as preventing economic cooperation. We believe in open regionalism.
Like ASEAN, the whole Asia-Pacific region has no reason to protect its economies by raising tariff walls and feeding hidden subsidies, because it need not fear competition.
At the same time, we are discovering in the Asia-Pacific community the remarkable fact that with economic growth, political liberalization and democracy usually follow.
The Philippines itself reclaimed its democracy in February 1986 by way of a peaceful, nonviolent people-power revolution after 14 years of authoritarian rule.
The many conflicts that once imperilled our republic have eased. Crime is on the wane. And we are moving decisively to forge with rebel groups a just and honorable peace that will last.
I will not waste your time by talking here about the historical ties and shaped ideals between our two countries. Though these are clearly important, they are not the factors on which businessmen act and venture. If the conditions back home are unattractive to investors, no amount of selling and sentiment can make a difference.
So the main message that I will stress is that the Philippines is back in business, in the heart of Asia and the Pacific, with a stable and functioning democracy—and it is time you took a fresh, second look.
A stable democracy
Whatever you may have heard about our country in the past, prepare yourselves for the reality that conditions have dramatically changed during the past two years.
Just as the world marveled in 1986 when our people overthrew a 20-year dictatorship, so we commend to your attention our present efforts to develop our country.
First, let me say something about the stability and strength of Philippine democracy today—for this we learned in no small part from America.
In the past, risk analysts and investors were worried by the instability of government in our country, because of coup attempts, insurgency and crime.
Today—I can tell you in all truth and sincerity—our democracy has never been more stable than it is now. As an elected President by a national electorate of 31 million voters, I am living proof of free democratic elections in my country. I have served in government for 47 years, the first 42 as a career military officer. I took the long arduous route in entering the political scene by our constitutional process—not by a military short cut common in some Asian and Latin-American societies.
Some have wondered whether our development objectives are well served by the exuberance of our democracy. They look longingly at some of our East Asian neighbors, where modernizing authoritarian regimes have brought unprecedented growth.
Maybe that is so in their case. But in our case, we accept as given both the reality of our democracy and the commitment of the Filipino people to democratic ideals. Some 20 years ago, one of my predecessors played the authoritarian card—and the result was a disaster.
Four D’s of modernization
National development does not lie in curtailing our democracy but in broadening it. The passage of the NAFTA bill by the U.S. House of Representatives yesterday is clear proof of the parallel sentiments of the American people in favor of a liberalized and more open economic system.
Development will come not with Government trying to do everything, but with Government harnessing the talents and energies of our private sector and citizenry.
The governments that have done the most for their people have been those that focused on essentials—and left the other tasks to private enterprise and community action.
This new strategy and outlook stand at the center of our national life today. We have pursued the four D’s of modernization—devolution, decentralization, deregulation and democratization.
This vision is embodied in my Government’s program of “Philippines 2000″—our national strategy for sustained development over the next six years and into the twenty-first century.
In politics we are devolving political authority from Metropolitan Manila to local governments, awarding control over local resources to local communities and nurturing local people’s organizations.
In the bureaucracy we are making Government units and public officials more accountable. We subscribe to the principle that the public must get full value for its tax money.
Economic reforms
As we expected, political stability has enabled us to focus our attention and energies on reviving and reforming the national economy.
Our most recent reforms allow the wider participation of foreign investment in nearly every aspect of the economy. We have freed all foreign-exchange transactions and begun a five-year program of tariff reduction.
To level the field for business competition, we are dismantling monopolies and cartels which are injurious to consumer welfare. We are opening up the banking industry. We have moved decisively to lift or modify Government regulation of business, and to privatize Government corporate ventures.
Inflation is down to 7 percent from three times that rate four years ago. Interest rates have declined to 11 percent, or half their level in 1991. The Philippine peso-to-U.S. dollar exchange rate is stable and at a level that spurs exports. Gross international reserves are at an all-time high of about $6.0 billion.
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 debt credit-worthiness and the confidence of the international community in our future.
Foreign investments are on an uptrend. From January to September this year, equity investments amounting to $787 million have been registered. Of these, 30 percent are from American and Japanese investors.
In our stock market, we are in the midst of a year-long bull run that has been adjudged the strongest and the most consistent in our region. The market index has nearly doubled since January.
Our international trade continues to grow. Exports totaled $7.1 billion from January to August this year, while imports totaled $11 billion during the same period.
And, perhaps most interesting to you, we have passed a new foreign investment law and a build-operate-transfer law that open our economy to foreign capital and liberalize foreign participation in our economic development.
These are not just policies on paper, but programs being rigorously carried out. And there are now signs these policies are working.
Thinking globally
This much, however, we can already say:
We Filipinos are prepared to account for ourselves—though we can certainly use all the help we can get from our friends in the world.
In the new world that is emerging from the Cold War, we see both good and evil omens. Superpower rivalry has eased, but multiple regional and local conflicts are emerging. Nations are one in seeking economic development, but the economic arena has also become more competitive.
These will test our nation’s capacity both to compete and to cooperate in building a new world.
Fortunately for us, we share values and purposes with other countries that cut across national boundaries and make it possible for nations to progress together.
We see our relationship with the United States in this light.
There was a time when our relationship was one of dependence. Today, neither of us needs “special” ties based on special privilege. Our relationship can survive on the basis of partnership, mutual advantage and mutual support. And it will prosper thus in the new world of opportunity in the Asia-Pacific region.
The Philippines shares a community of interests with the United States, especially a common commitment to democracy and free enterprise.
The Philippines and the United States continue to be security allies under the Philippines-U.S. 1951 Mutual Defense Treaty.
Our special relationship is also anchored now on the growing political and economic power of Filipino-American communities.
There are now more than two million Filipino-Americans in this country who form a vital link between the Philippines and the United States.
Experience of investors
These facts and numbers are the aggregates of what is happening in my country. Now let us look at specific examples of what is going on.
Several prime investment sites have been opened up, and significantly some of them are former baselands.
Subic Bay is now a special economic zone and free port and one of our brightest growth centers. It has its own international airport. So far it has completed 32 contracts and agreements with American and Asian investors, involving some $350 million in long-term investments. Federal Express has just signed up to locate in Subic to establish its Asia-Pacific regional center.
We are now opening up Clark Air Base in Pampanga as the future international airport for Greater Manila and Central Luzon.
The other rising centers of economic activity are Baguio, Pangasinan, La Union and Batangas in Luzon; Cebu in the Visayas; and Davao, Cagayan de Oro and South Cotabato in Mindanao. In all of them, foreign investments are welcome and are already coming in. And some, like Cebu, are now major contributors to the gross domestic product.
Some of you will perhaps wonder: Is it profitable to do business in the Philippines? I will answer, yes. And you only have to ask your countrymen who are already doing business there.
Citibank Manila, for example, is the most profitable Citibank branch in the world.
The Coca-Cola bottling plant just south of Manila is the company’s biggest in the world.
Occidental Petroleum and Shell International are developing one of the biggest oil and gas finds in Asia during this decade.
Comparative advantages
There are many other corporate examples I can mention, but I think my point is clear. Doing business in the Philippines has its unique advantages. Many Asian investors know this. But I think our American friends, especially you from Texas, have always known this better than most.
The comparative advantages are there. Filipino manpower skills and expertise—ranging from those of manual workers to technical talents to professional managers—are among the best in Asia. Indeed, Filipino expatriates are believed to be a key to maintaining the business boom in other parts of the Asia-Pacific.
You will not need interpreters to do business in the Philippines. In addition, we have considerable natural resources to complement various industrial undertakings.
But we have had a habit of shooting ourselves in the foot in the past. Where we usually failed was on the Government end. When political instability was not ruining our economic prospects—such as shortly after February 1986 and again in 1989—we were erecting all kinds of barriers to business and neglecting the country’s infrastructure. The power shortage that hobbled us last year and early this year is just an extreme instance of Government failure.
We are putting these costly experiences behind us and we are already correcting these shortcomings. The power shortage will be substantially solved by the end of this year. We are finally modernizing and opening up our telecommunications industry, and rebuilding and expanding our network of roads, ports, airports and other infrastructure.
In the past we could not do much of anything, because we were politically divided. Today we are better able to deal with the problems because Congress and the executive are working much more closely together. There is also a quiet confidence throughout the country in the national leadership, and our people are more cohesive socially.
“Put the Philippines on the map of the U.S.”
In his writings, President William McKinley relates how he agonized over whether to annex the Philippines and how he finally decided to go for it. “And then I went to bed,” he says, “and went to sleep, and slept soundly, and the next morning I sent for the chief engineer of the War Department and told him to put the Philippines on the map of the United States.”
In our minds, however, there is still a map in which the United States and the Philippines are fatefully joined—by history, joined by our alliance in war, joined by mutual concern for each other’s well-being and success.
This relationship survives because we acknowledge there are certain things we share, which time can never break.
We are not just nations with diplomatic ties. We are partners and we are friends. We fought together to uphold freedom and democracy on many battlefields—Bataan and Corregidor, Korea, Vietnam. In this spirit, let us explore together the world of opportunity between our shores.
Join us in the great adventure of developing the Philippines. Believe me, you will not regret it!