Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
To the National Chamber of Commerce and Industries of Malaysia

Delivered in Kuala Lumpur, Malaysia, January 28, 1993]

Look to the Philippines

I AM GRATEFUL to all of you in this Chamber for giving this traveling salesman from the Philippines this chance to speak to the commercial and industrial leadership of Malaysia.

And I must thank you for that very fine lunch. I understand that there is a saying here that nothing is perfect in this world:

Gidai sedap nasi mentah, nasi sedap gulai mentah. (When the curry is good, the rice is half-cooked; when the rice is good, the curry is tasteless.)

But today, not only was the curry good: the rice too was properly cooked.

Our two countries were joined together by blood, language and culture long before they were linked by history.

Reaffirming regional fraternity

I was happy for this chance to visit—at the gracious invitation of His Majesty, the Yang di-Pertuan Agong—to reaffirm the fraternity of our two countries and to renew our commitment to our partnership in ASEAN.

I also came to tell you of how, in the Philippines, we have restored political stability and prepared the ground for economic expansion. As my country begins our own ascent to growth, Malaysia’s own epic of development begins to inspire us, and makes us determined to become a newly industrializing economy by the year 2000.

Hospitality to foreign investment and an openness to outside competition are integral to our development plans. And since the greatest returns will naturally come to those who are first in, I have also come to invite you, industrialists and businessmen of Malaysia, to look to the Philippines—now.

Our business fundamentals

Free and peaceful elections last May and the orderly transition of political authority have renewed Filipino optimism. Since then my Government has initiated political, economic and social reforms, and has set in motion programs that should assure self-sustaining growth and enhance social cohesion.

Our Development Plan for 1993-98 aims to ease mass poverty, reduce income inequality, generate industrial jobs and pursue comprehensive human-resource development.

By the time my term ends in 1998, the Philippines should be hitting at least eight percent in real GNP growth. Income per head shall have reached at least US$1,000, and poverty incidence reduced from today’s 50 percent to less than 30 percent.

In preparing the ground for growth, my Administration began with obligatory tasks like restoring political stability and civic order.

Our offer of amnesty and legalization for the underground Communist Party has recovered for the Philippine Government the moral high ground in its 23-year-old struggle against East Asia’s last radical insurgency.

Even the most impetuous of our young military rebels have been persuaded to re-enter civil society, and talks have also begun between our National Unification Commission and separatist forces in Mindanao.

A Presidential Anti-Crime Commission, headed by my Vice-President, is dealing with kidnapping and other heinous crimes. I myself have initiated a thorough cleansing of the national police and the armed forces.

And industrial peace has been restored, after the unrest of the 1986 period.

We have also begun freeing the economy and opening it to outside competition. We removed controls on foreign-exchange transactions that had been in place for 40 years; and privatized both the flag-carrier, Philippine Airlines, and the Philippine National Bank. And we are moving progressively to reduce tariffs and quantitative restrictions on most of our imports.

Tariff-restructuring should reduce the average tariff level from 28 percent to 20 percent by 1995. And out of 2,900 items on our import restrictions list in 1980, only 136 remain.

On the foreign debt, a financing package we signed last July should reduce our debt-service obligation as a percentage of exports from about 19 percent in 1992 to 16 percent in 1993.

We have also kept down inflation and reduced interest rates from 25 percent to 1 percent durign the same period—while ensuring the continued flow of foreign credit.

Infrastructure investments

Government agencies are mounting a massive and joint effort to expand both our hard infrastructure—power and energy, telecommunications, transportation, water supplies, housing—and for soft infrastructure such as financial, professional, security and health services.

Our 1993 budget commits the equivalent of US$3.8 billion to public investments and capital outlays. We look to our expenditures in infrastructure both as investments in future growth and as a pump-priming mechanism to jump-start the economy to renewed growth.

To accelerate power and energy development, we have reestablished a Cabinet-level Department of Energy. Already we have signed six fast-track contracts for power plants under variations of the build-operate-transfer scheme.

By September this year, 10 ongoing power-generation projects should add a combined capacity of 1,464 megawatts—a quantity sufficient to cover our immediate requirements.

We are granting duty-free incentives for power generators, and business and industry have installed some 800 megawatts of additional generating capacity.

Incentives for foreign investment

We are acutely aware that we cannot, on our own, generate the capital and the technological skills we need to enable our economy to develop rapidly.

We also realize how much the remarkable growth of East Asia is owed to the adoption of market-oriented policies that focus on international trade and investment.

Our hospitality to foreign investment is therefore wholehearted and unequivocal. The Foreign Investments Act of 1991, for instance, allows corporations owned entirely by non-nationals full access to our home market.

We are amending existing laws and liberalizing nationality requirements to make foreign companies secure in the possession of their plant sites in our industrial estates.

We are deregulating industries such as shipping, telecommunications, banking, insurance, oil-refining and marketing, and the retail trade—to make them accessible to foreign investors.

I am very pleased to report to you a recent breakthrough in Islamic banking in the Philippines. By virtue of commitments of capital infusions by the Al-Baraka Investment Group, represented here in Malaysia by Kamarudin Mohammad Nor, and Filipino Muslim investors headed by the Mastura group, the Government-owned Al-Amanah Islamic Investment Bank of the Philippines has been revitalized.

We are also working to disperse our industries to the countryside—to regional industrial centers, industrial estates and parks, and export-processing zones and free ports that have been set up all over the archipelago.

The most prominent of these industrial zones include the Subic Bay Special Economic Zone, northwest of Metro Manila, and the rich region of five provinces south of our capital city, which we call CALABARZON. In the Visayas, there is Cebu; and on Mindanao Island, Davao and Cagayan de Oro.

Your role in our economy

We sincerely hope Malaysian investors and industrialists see their way to taking part in our efforts to raise our economy to industrial status.

As you know, the framework on ASEAN Economic Cooperation envisions subregional economic arrangements—growth triangles—as one way of speeding up the development of our free-trade area.

One such growth triangle can be southern Mindanao, Sulawesi and Sabah. There could be other such undertakings involving Malaysia and the Philippines with other partners.

We see AFTA as a means to strengthen the competitive position of our industries in international markets by providing access to a regional market of 320 million people with rapidly increasing disposable incomes.

At the moment, there is a great deal of slack in our two-way trade and investments in each other’s economy.

The record of Malaysian investments in the Philippines shows an inconsistent trend. From US$ 271,000 in 1987 and US$ 10.7 million in 1989, Malaysian investments approved by our Board of Investments decreased to US$ 552,000 in 1991. The 1991 investments from Malaysia represented less than 1 percent of total foreign investments in the Philippines.

During 1986-91 our bilateral trade volume was in Malaysia’s favor at a 3:1 ratio. The Pliilippines incurred a trade deficit of US$769 million in the first 11 months of 1992 alone. We incurred another US$ 238-million deficit in trade, mainly because of oil imports.

A question of political will

Let me now sum up my salesman’s pitch this afternoon:

My Government regards as the cornerstone of its foreign relations a policy of strengthening ties with old friends and trading partners, while developing new friendships in the world.

We regard Malaysia as a brother-nation and we see the ASEAN Free-Trade Area as a main means to strengthen our competitiveness in world markets.

We also regard tourism between our two peoples as an important enterprise for closer understanding and appreciation of our cultures and ways of life. To this end I gave the other day approval for your Malaysian Air System for two additional frequencies per week for its Kota Kinabalu-Cebu route and back.

My country has always possessed the basic ingredients for self-sustaining growth. All it had lacked was the leadership with the will to focus our wealth of human and natural resources on achieving the national goal of attaining industrialized status by the turn of the century.

That political will is lacking no longer and is in place.

My Administration has made and will continue to make hard decisions. The national leadership shall act as one, with dispatch and with direction.

Just as important, once decisions are made, Government shall stand by them. You can count on our investment policies to be consistent and predictable, and the policy environment a hospitable and investor-friendly playing ground.

So, to all of you, my Malaysian brothers, I say look to the new Philippines, examine the prospects, and you will find the curry delicious and the rice well-cooked.

Terima kasih, saudara-saudara: Mabuhay.