INTRODUCTION
Nitong nakaraang taon, dumaan tayo sa maraming pagsubok — mga pagsubok sa ating katatagan, paniniwala, at pagtitiwala sa ating kakayahan.

Bilang nagkakaisang bansa, hinarap natin ang mga pagsubok na ito — upang patuloy na tahakin nang lalong matibay na loob ang landas tungo sa hinahangad nating kapayapaan at kaunlaran.

This past year, we faced several crises which threatened the economic, social and political gains we had steadily built up since mid-1992.

The Maga-Contemplacion case; terrorism in Ipil, Zamboanga del Sur; the rice shortage; continuing devastation by lahar of Central Luzon; Super Typhoon “rosing”; an upsurge in criminality — all these tested our resolve and our capacity to cope.

That we passed these crucial tests — with flying colors — testifies to the vigor of our socio-economic momentum and the strength of our political will to overcome and solve our problems.

And so, we welcome the new year with a reinvigorated spirit — confident in our resilient capabilities, and determined to pursue our drive toward peace and progress.
A TURNAROUND IN COMPETITIVENESS
Three-and-a-half years ago — when I first took up the burden of the presidency — our country was literally in darkness.

A power shortage had cast a pall of gloom over our homes — and brought our industries to a near stop.

Politically, we were beset by coup threats from the right; a potent insurgency from the Left; and a secessionist movement in major parts of our Muslim community.

Our economy was stagnant — and hardly any tourists — much less investors — dared venture towards our shores.

All these problems are merely memories now.

The energy crisis we ended by building power plants on a creative Build-Operate-Transfer (B-O-T) Scheme that has become a model for the developing world.

Private-sector dynamism enabled us to upgrade our infrastructure — not only power plants but also telecommunications, transport, water, housing and tourism facilities. And these new highways, telephones, irrigation systems, farm-to-market roads — enabled us to boost the growth potentials of our countryside– and to connect our new growth corridors to established centers of economic enterprise.

Our peace initiative cut down dissidence so successfully that it has become a model likewise for developing countries facing internal conflicts. With the military rebels, government has reached an agreement which commits both sides to a complete — and permanent — cessation of hostilities.

The secessionist forces have come to the negotiating table. Their self-exiled leader has returned home — and is campaigning peaceably for autonomy in Mindanao.

Only the communist insurgents remain so unreasonable in their demands that talks with them have had to be suspended. But the intransigence of their hardline leaders — in the face of government’s hand of friendship and goodwill — has cost them loss of support, and disillusion among their followers. And we continue patiently to keep our communication lines open to them.
PRO-PROGRESS: AN OPEN ENVIRONMENT FOR BUSINESS
In the economy, we accomplished a turnaround that has won the admiration of international leaders and institutions, and triggered countryside development and job-generation.

The International Monetary Fund (IMF) has removed the Philippines from its list of so-called “poor countries” that are eligible to borrow concessional loans from the IMF to meet balance of payments (BOP) problems.

To qualify as a “low-income country”, the per capita income of a borrowing country must not exceed $865 for the whole of 1994. For that year, however, the Philippines’ per capita income went up to $960 from $770 in 1992, with a purchasing-power parity (PPP) in late 1995 of $2,660 per capita, up from $2,480 in 1994.

We have created a free and open environment for business — by liberalizing our economy and deregulating our industries.

Our country has now become one of the most attractive investment destinations in the Asia-Pacific.

The policy changes and corrective measures we began in 1992 have begun to pay off — modestly at first, and then by bigger and bigger increments.

From zero growth at the start of 1992, the economy grew by one percent as that year ended. Gross national product (GNP) grew by 2.6 percent in real terms in 1993 — and by 5.1 percent in 1994.

The final figures are not yet in. But we estimate GNP real growth to be around 6 percent for 1995. And we project it to hit 7 percent in 1996.

After that, growth should accelerate to a “cruising speed” of 8% GNP with single-digit inflation rates that will keep us competitive with our more prosperous neighbors.
PRO-POOR: OUR SOCIAL REFORM AGENDA
Philippine development has two important goals:

To raise the quality of life of ordinary people; and to earn for our country its rightful place of dignity in the community of nations.

These two goals we have summed up in our vision of “Philippines 2000!!!” — to reach the threshold of newly industrializing country (NIC) status by the turn of the century. “Philippines 2000!!!” is to be realized through the twin strategies of people empowerment and global competitiveness.

By global competitiveness, we mean Filipino products and services that can compare with the best in the world. By people empowerment, we mean improving the capacity of ordinary Filipinos to be more productive, more efficient and quality-oriented, thus enabling them to take better control of their lives, and the future of both their families and communities.

People empowerment is the goal of our Social Reform Agenda (SRA) — which we began in mid-1994 — and its immediate object is to insure a more equitable sharing of the fruits of development and democracy.
STRATEGIES TO FIGHT POVERTY
As we worked to give our poor and disadvantaged sectors access to quality basic services and better means to earn their living, however, we were besieged by crises and calamities.

The Maga-Contemplacion case led us to review our entire overseas-worker policy — to improve our programs and interventions — in response to the needs and problems of our heroic overseas Filipino workers (OFWs).

We adopted measures that will ensure our migrant workers are protected from illegal recruiters here at home and provided better terms and working conditions in their host-countries.

The basic change is that government has ceased to view overseas employment as just another program for generating revenues and foreign exchange.

Socially, the main purpose of our agricultural modernization and economic industrialization program is to create more jobs, livelihood opportunities and higher family income here at home.

As of 1991, with the labor force increasing to 25.2 million, we had a backlog of some 2.3 million jobless work-people or an unemployment rate of 9.1% — even while about 860,000 young people were entering our work-force every year.

As of October 1995, the number of our unemployed is also at some 2.3 million in a larger work force of more than 28.0 million or an unemployment rate of 8.3%. Underemployment was reduced from 22.1% in October 1991 to 19.6% by October 1995.

Higher growth rates will generate even more job opportunities — which will enable us to wipe out our backlog of the unemployed, and bring back our overseas workers to decent and socially useful jobs here at home.

As a result of this and other government interventions, poverty incidence overall — which was at 39.2 percent as of 1991 — has been reduced to 35.7 percent. And this reduction of poverty has been most evident in our regional and provincial growth centers and urban areas.

But we have barely pushed back the frontiers of Philippine poverty. That we have to do a great deal more I, as your President, realize more than anyone else.
CARING FOR OUR SUBSISTENCE POOR
Some 72 percent of all our poor families live in the rural areas; and some 60 percent of them earn what income they have primarily from agriculture.

These subsistence poor are the least able to take advantage of economic growth so far. They are the least equipped to compete in a market economy — because they are mostly unprepared in terms of education, health, and work skills. And most of them do not yet have easy access to non-usurious credit.

Our Social Reform Agenda addresses their plight through other interventions — for example, by providing livelihood programs and credit assistance, as well as skills training and sectoral capability-building.

This administration has in fact made significant in-roads in improving financial accessibility to small-and-medium scale enterprises (SMEs). From 1946 to 1992, banks lent a total of some p16 billion to SMEs, but from July 1992 to mid-1995, banks had lent out a total of about p57 billion to small enterprises, with a repayment rate of more than 95% back to the lenders.

By providing the proper atmosphere conducive to lending and financing even to the micro- and mini-businesses, it only took two-and-a-half years for this administration to surpass the total amount lent by the banks to SMEs in 46 years before 1992.

Last year we released p1.6 billion to some 45,000 small borrowers — as seed money to fund livelihood projects which would allow them to move out of marginal subsistence and enter into the mainstream of the economy.

Through government’s other lending windows, farmers availed of another p1.0 billion worth of production loans. And we continued to ease land hunger and social inequity in the countryside by intensifying our implementation of the Comprehensive Agrarian Reform Program.

Last month, we established the Punla Development Trust which taps the private sector more intensively in our capital fund development to finance at concessional rates the self-reliant enterprises of the poor.
THE LESSON FROM LAST YEAR’S CRISES
The droughts, locusts, foot-and-mouth disease, super typhoons and other natural calamities our people endured last year heightened this administration’s resolve to strengthen the autonomy and capabilities of our local government units (LGUs).

The central government continues to encourage our LGUs towards greater self-reliance — including the establishment of a more effective response network to cope with natural calamities.

Local governments must be weaned away from their inordinate dependence on the central government. They must learn to team up with other LGUs — or to band as regions and sub-regions to hasten their own progress.
EVERY INDIVIDUAL MUST DO HIS PART
Not just local governments but every single Filipino must resolve to do his or her part — because the national government cannot do everything by itself.

The upsurge in criminality, persistent corruption in the bureaucracy, even the worsening traffic situation in Metro Manila — all these should concern not just government but of every one of us.

We should all have a higher regard for the law — we should impose on ourselves the self-discipline to obey the rules laid down for all of us to follow.

There is a lesson to be learned from all our difficulties last year.

And it is this: the economic and social reforms we want to achieve are not the task of government alone. If we want them to succeed, we must attract the support and cooperation of everyone: the bureaucracy, the private business sector, non-government and people’s organizations, the cooperatives, the media, LGUs, the religious, the academe, the civic organizations and individual citizens themselves.
COMMUNICATING OUR ACCOMPLISHMENTS
Let us put everything we have been trying to do in the proper perspective.

After all, we had planned them according to a larger strategic, long-term design. And so, we should view them not in isolation but as parts of a larger picture.

Consider government’s decision to demolish squatter shanties and colonies in rights-of-way, hazard areas and other high-risk locations in various parts of metro manila. Before we decided to do so, we made ready new resettlement and housing communities for those who live in these slums, to move into, with training, job opportunities and transportation linkages awaiting them.

This is true of “Smokey Mountain,” which we are transforming from the symbol of our people’s degradation to a showcase of our efforts at poverty alleviation and benefit-sharing.

As part of this effort, we recently inaugurated R-10 road leading to the North Harbor — whose expanded activities should mean more job opportunities for poor Tondo residents — including those from Smokey Mountain.
PRESIDENTIAL MISSIONS ABROAD
Last year also, I embarked on several missions abroad — most of them “must visits,” meaning that our country’s non-attendance would have reflected badly on our standing in the international community.

In Denmark in March, I had the privilege of addressing the delegates to the world summit on social development — which dealt with the challenges posed by global poverty and underdevelopment.

I went to Kuala Lumpur in early October to keynote the International Conference on “Dr. Jose Rizal and the Asian Renaissance” — which the Malaysian government organized as its own tribute to our national hero it regards as the pride of all the Malay peoples.

At the 11th Non-Aligned Movement Summit in Colombia and the United Nations’ 50th anniversary in the United States — also last October — I was accorded the distinction of speaking for some 134 developing countries, collectively known as the Group of 77.

In November, I attended in Osaka the Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit representing 18 economies on both sides of the Pacific. The Philippines will host the 1996 Summit of all the APEC leaders.

Last month, I attended the Fifth ASEAN Summit in Bangkok — which produced a landmark agreement to create a zone free of all nuclear weapons in Southeast Asia.

Our new global partnerships were enhanced by the visits in 1995 of some nineteen foreign heads of state and government. These included the prime ministers of Thailand, Malaysia, Lithuania, Vanuatu, Pakistan; and the presidents of Vietnam, Singapore, Kyrgyzstan, Panama, Argentina, Chile, the Czech Republic, and Iran; the kings of Spain and Malaysia; the governor of Hong Kong, and His Holiness Pope John Paul II.

In the new world order, these visits enable us to maximize our economic, political and socio-cultural gains, expand our foreign linkages, and strengthen our relationships with our neighbors. They confirm our strategic position in the region — as well as our place as an active player in the world’s fastest-growing region.
OUR INDICATIVE AGENDA FOR 1996
In 1996, we begin a series of activities leading to the celebration of the most important milestone in our history as a nation so far — the 100th year of our declaration of independence. This commemoration takes into account four centuries of our people’s fight for freedom — leading to the Philippine Revolution of 1896 and culminating in our declaration of independence from Spain and the establishment of Asia’s first Republic on June 12, 1898.

Other important commemorations in 1996 include the 10th anniversary of our People Power Revolution at EDSA on February 25, 1996 and the 50th anniversary of our independence from the United States on July 4, 1996.

As we approach the centenary of our independence, we must move faster in our effort to lift up the common life — so that we can begin to achieve for our people the dream of a free and prosperous Philippines that had always inspired our heroes.

In 1996, we must achieve the following:

* Comprehensive tax reform which is the cornerstone of our economic reform program. We must broaden the tax base; simplify the tax system; equalize the tax burden, and strengthen tax collection and enforcement — so that we can meet the unavoidable costs of modernization.

* The vestiges of protectionist economic policies we must eliminate from our policy and law books — and from our tariff system.

* The judicial system we must reform — to reinforce respect for the rule of law, which is the foundation of stability and civil order, and the guarantor of fair and equal competition.

* Criminality and threats of terrorism we must stamp out aggressively, with the closer cooperation of the five pillars of the justice system.

* The infrastructure projects our economy needs to sustain its growth we must upgrade, build and modernize.

* The bureaucracy we must retool and re-engineer, even as we enhance the morale and efficiency of our government work force by upgrading their basic salaries. Indeed, administrative reform should encompass the entire political system — to rid it of money politics and to build up strong and responsible party mechanisms. Continued electoral reforms will speed up this process.

* Our police and our armed forces, we must improve and modernize, to better protect our people from criminality and any other threats — whether from without or from within.

* Food security we must insure for all by better production efficiency, timely interventions and effective distribution.

* The environment we must preserve for future generations to enjoy and we must use our God-given natural resources judiciously to actualize our pro-poor, pro-progress strategies.

* And the global community we must partner with, effectively, for our own development.

As in the past, addressing these challenges — and moving forward — will require our unwavering resolve to work as a national team.

We must continue to hold our heads high with confidence and optimism, and to keep faith with one another.
CLOSING
By the end of 1996, we will have completed most of the tasks we set out to do — to restore political stability; open up the economy; ensure a pro-poor and more equitable sharing of the fruits of development; and give substance to our democratic system.

Our pro-poor, pro-progress track in 1995 on to 1996 is well exemplified by our countryside development program under the Philippine Economic Zone Authority (PEZA). Across the entire length and breadth of our archipelago from Santa Ana, Cagayan to General Santos City, from Tacloban City to Palawan, some 40 regional and provincial growth centers are being developed and invested in by government and the private sectors. Thus, the rural poor and the urban poor are accessing to job and livelihood opportunities which, back in 1991, were limited to the Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon), Cebu-Mactan and a few other areas.

The task that will then remain is to ensure the continuity of reform — because democratic reform is the work not of a single presidency but of successive political generations.

And that task is properly ours as leaders and yours out there as the electorate and sovereign people.

Naipakita natin sa nagdaang tatlo at kalahating taon na may kakayahan ang Pilipinong makipag-sabayan sa pagsulong ng ating mga karatig-bansa.

Sa pamamagitan ng ating tagumpay sa larangan ng katiwasayang pampulitika at pag-angat ng ekonomiya, nanumbalik ang ating pag-asa na kaya nating makamit ang iba pa nating adhikain bago matapos ang aking pangasiwaan.

Hindi tayo dapat masiraan ng loob sa mga suliranin na ating dinanas sa nakaraang taon. Bagkus ay pagtibayin natin ang ating pagkakaisa at pagtutulungan.

Malayo na ang ating narating. Sa tulong ng poong maykapal at ng ating pagsisikap, naghihintay sa atin ang katuparan ng ating pangarap na maaya at maunlad na bansang Pilipinas.

Mapayapa at masaganang bagong taon sa inyong lahat!

Mabuhay ang Pilipinas! Mabuhay ang ating inang bayan!!!

Salamat po sa inyong lahat!