INTRODUCTION
Muli akong nag-uulat sa inyo tungkol sa ating mga nagawa at natamo nitong mga nakaraang labindalawang buwan.

Itong Ulat sa Bayan ay hindi lamang isang taunang ritwal o seremonya. Isang pagkakataon ito upang malaman nating lahat — at mapag-aralan — kung nasaan na tayo sa landas ng ating pag-unlad, at kung gaano pa kalayo ang ating lalakbayin patungo sa kinabukasang ating hinahangad.

Batid ko na higit sa anumang tagumpay ng isang pangulo o ng isang administrasyon, iisang tanong lamang ang pinakamatimbang sa ating mga mamamayan: “nakaka-angat ba tayo ngayon kung ihahambing sa ating kinatatayuan noong nakaraang taon?”

Ang maisasagot ko riyan ay isang masigla at malinaw na “oo!”

This “report to the nation” is more than just an annual ceremony. It is a time for us to take stock of where we are in our advance to national progress.

In the end, the success of a president and his administration can only be measured by a straight and honest answer to the simplest and yet most difficult of a citizen’s questions: “are we better off today than we were a year ago?”

My answer to that is a resounding “yes!”

Not only are we better off — by the most significant measures of performance. We are also better-placed to take advantage of opportunities that have opened for sustained growth and progress.

We have set in motion the policies and programs that will enable us to overcome our difficulties and move forward faster.
A NEW OPTIMISM
When I spoke to you last year, we were suffering under a severe power shortage. We were losing an average of almost 8 hours a day or 200 hours per month to brownouts — and billions of pesos in terms of productivity foregone.

Today, that figure has dropped to less than 6 minutes a month. Now we have even achieved an adequate surplus over our actual power needs.

We were able to achieve this dramatic turnaround — despite the skeptics’ direst predictions — by simply doing what we said we would: by building and rehabilitating our power plants, and by enforcing a vigorous energy-conservation program.

What more tangible proof do we need than — if we put our minds and efforts into doing the right things — we can achieve what the weak-hearted would call impossible?

We must have faith in ourselves, faith in the rightness of our cause, faith in the correctness of our course.

The most objective observers — and even our most bitter critics — now agree: there is a change one can feel, in the atmosphere here at home. There is a new optimism, a new confidence in our own capabilities. And that optimism is founded — not on wishful expectations — but on solid performance and real, deep-rooted change.

In a recent report on the Philippine economy, the Singapore Straits Times cited the high marks given the Philippines by three major international financial institutions — Barclays, first Boston, and Salomon Brothers. “Respected people have predicted turnarounds before,” said the Straits Times, “and they have been wrong. But this year seems distinctly different”.

Echoing the same opinion, the Financial Times of London described the Philippines as a “tiger cub” which has begun “to find its feet”.

Let me assure you — my dear countrymen — that I do know what I am doing. Alam ko po ang aking ginagawa. And it is nothing less than the reason you voted me to this office: to get our beloved Philippines back on its feet, to give hope to our people, and to give material substance to that hope.

And our efforts are beginning to pay off.
INDICATORS OF NEW GROWTH
The economic indicators for the first quarter of 1994 show all the signs of sustained stability and even brighter prospects ahead.

Let me review just a few of those indicators.

This first quarter, our gross national product (GNP) in real terms grew by 4.84% — a dramatic turnaround from 0.27% over the same period last year.

Growth in the past was not sustained because it was generated by consumption. It died out as soon as pent-up demand — and savings — were spent. The difference now is that GNP growth is led by investments and exports.

Increase in investment multiplied almost four times — from last year’s 5.2% to this quarter’s 19.0%.

We find the same remarkable growth in exports — which during the same period last year stood at only 0.22%, yet during the first four months of 1994 grew by 16.2%. Exports broke the $11 billion mark last year — and should easily breach that new record this year.

Inflation has returned to single-digit rates — it averaged 9.8% over the first quarter — and the interest rates on treasury bills have continued to fall.

In a tremendous testimony to our recovery, the stock market has grown spectacularly, and foreign equity investments grew by over 100%, largely due to private sector commitments.
ENHANCED INDUSTRIAL PEACE
For the first quarter of 1994, the value of our industrial production rose by 7.67%, more than doubling last year’s figure. This was no doubt helped along not only by industry’s expansion programs, but especially by enhanced industrial peace as the number of strikes fell by 32%, from 49 to 32 nationwide, comparing 1993 and 1994 figures.

Agriculture declined by 0.92%, largely because of 32 destructive typhoons in 1993. But we expect it to improve sharply during the rest of the year through our agricultural productivity initiatives whether there will be bad or good weather.

Given the momentum we have gained, i am confident we can reach — or even exceed — our target of 4.5% growth for the whole of 1994.

Ang ibig pong sabihin ng mga bilang na ito ay nakaraos na rin tayo sa mga unang pagsubok ng ating kakayahan. Sumisigla ang ekonomiya, sapagkat ipinatupad natin ang wastong pagpaplano, at ang tamang patakaran.

Noong isang taon, maraming nagsasabi na hindi natin magagawa ito. Ngayon, tayo naman ang magsasabi sa kanila na higit pa riyan ang ating kakayanin, ang ating ipakikita.

A year ago, nearly everyone was telling us it just could not be done. And now we are here to tell them that we intend to do even better.
REINFORCING POLITICAL STABILITY
Our economic performance was made possible by underlying achievements in our political and social environment.

In politics, we have maintained and reinforced the stability of our democracy and its processes.

The leaders of Congress and I have agreed we cannot allow ourselves to be sidetracked by political differences from our quest for sustained and enduring progress.

Thus, I have maintained a harmonious and productive relationship with the leaders of both the House and the Senate which enabled us to carry out a common legislative agenda.

Of the 15 top priority bills under this agenda, we have enacted 11 into law — those further liberalizing the economy, enhancing revenue generation and expanding and improving our education system.

We have reached out to our people — through people’s organizations (POs), cooperatives, non-government organizations (NGOs), as well as business, organized labor, religious and other sectoral and civic groups — consulting with them continuously on matters of community and national concern, and involving them in decision-making and problem-solving through a series of social pacts and social contracts.

Beyond mere talk about economic democracy, we have accelerated the agrarian reform program. Over this first quarter, we distributed almost 90,000 hectares to their tenant-tillers — almost double last year’s figure — and enhanced their productivity in the process.

And most significantly, in terms of our social cohesion and strategic unity as one nation, we issued two proclamations granting amnesty to political dissidents wishing to return to civil society. We see such amnesty as an integral part of the overall peace process — as a compassionate coming-to-terms with the past — as a step in unison toward a just and lasting peace.

On the other hand, we have been unrelenting in dealing with criminality.

“Oplan Paglalansag” — a campaign to break the back of so-called warlords and private armed groups and bring in loose firearms — confiscated some 27,000 firearms and neutralized almost 600 armed groups.

Even as we made peace at home, so did we gain new friends abroad. We have given much importance to economic diplomacy, knowing the confidence and renewed interest of foreign friends and investors are vital to growth here at home.
A RESURGENT ECONOMY
From the very start, we were convinced we needed to move boldly in economic policy if we are to catch up and successfully compete with our Asian neighbors.
We have just concluded negotiations with the International Monetary Fund (IMF) for an exit program — which shall be a milestone in our economic recovery. What is more, the IMF’s seal of good housekeeping facilitates our access to new resources and concessions for development — from the Paris Club of Donor Countries and the Philippine Assistance Program (PAP).

We have recast government’s role in the economy. From being the guardian of retarded infant industries, from being itself an obstacle to growth, government has now become a booster of competitive private enterprise.

The benefits from our new investments in infrastructure are streaming out to the countryside — where new growth centers are emerging.

For far too long, Metro Manila and other big cities have dominated our economic life — diminishing the prospects of other areas while adding on to their own problems.

This has started to change with the inflow of fresh investments into such new economic growth centers as Subic Bay, Clark-Pampanga, Baguio-Ilocandia, Quezon-Bicol, Cagayan de Oro-Misamis Oriental-Iligan, and the South Cotabato-Sarangani-general santos, or Socsargen area in Mindanao.

Vigorous economic diplomacy has resulted in the enthusiastic acceptance by our Asian neighbors of our concept of an East ASEAN Growth Area (EAGA) — which will open, for Mindanao, a southern polygon of opportunity and growth.

But we have also launched the “Kabuhayan 2000!!!” program — designed to reinforce our underground economy and create two million jobs all over the country over the next two years.

But we have not neglected our urban centers. We implement new housing, zonal improvement, solid waste management and livelihood programs to ease the pressures of urban congestion and poverty.

For example, we have started to transform the Smokey Mountain and Payatas Dumpsites — long-standing symbols of our neglect — into clean, productive and livable communities.

To support the growth of the economy, we have adopted a “flagship” system in at least 18 different regional centers to give priority to strategic projects.

Our objective here is to build a road, a bridge, a seaport, a skyway, an airport or a trading center where it is needed most, and in the shortest possible time. This year, we will work on 44 such flagship projects throughout the country, at a total cost of some p55 billion.
PROTECTING THE ENVIRONMENT
We are renewing the countryside — to engage the majority of our people who live there in all aspects of our development.

But in doing so, we take utmost care not to abuse, not to compromise, our patrimony — the environment and our natural resources.

To improve air quality in our urban areas, we have begun the sale and distribution of lead-free gasoline. With the integrated national waste management framework, we are setting up a sustainable and efficient national waste disposal system.

We are rehabilitating the Manila Bay area, covering a 24-kilometer coastline from Las Piñas to Navotas. At the same time, we have assigned a presidential commission each to protect and develop the Cordillera Rice Terraces and the Tagaytay-Taal Lake areas, and we shall soon do the same for the “Lungsod Silangan” area, within the Marikina-Infanta Corridor. We are cleaning and greening the Pasig, and have put in place some 300 agrarian reform communities to enhance integrated development in our 200 congressional districts.

We are now tackling the water supply and utilization problem countrywide — to solve the dilemma of how a country with one of the heaviest rainfalls in the world can continue to be short of potable water supply and irrigation facilities.
REFORMING THE BUREAUCRACY
And yet all these reforms and improvements in our physical landscape would be fruitless — if not impossible — unless we internalize commensurate reforms within ourselves.

I speak here of the basic virtues and values that have always been the sources of our strength as a people. I speak of honesty, industry, perseverance, and patriotism — which are themselves humbling but ennobling proofs of our love of God, of country, of our fellowmen, of mother nature.

These qualities must be found first of all within government itself. Kailangang manguna at magsilbing halimbawa ang pamahalaan sa pagpapapakita ng pag-ibig sa Diyos, sa Bayan, sa kapwa-tao at sa kalikasan.

At the very beginning of my administration, I served notice that I would not tolerate corruption or inefficiency in government. It is a long and painful process to undo the bad habits of decades and to reform the culture of our bureaucracy — but this we have begun to do.

Government must be more responsive to the needs of our people; it must be transparent about its business; it must provide good service, where and when needed. That is our electoral contract with every citizen. This duty I am determined to fulfill.

We have decentralized the Office of the President, to bring it closer to the people. We have reviewed the management of 81 of our largest government corporations, to check on their performance.

Earlier this year, I created the Presidential Commission against Graft and Corruption (PCGC) to underscore my commitment not to spare anyone — not even presidential appointees — should any of them be found guilty of wrongdoing.

We are cleaning up the ranks of our police to restore dignity and pride to the law enforcer’s uniform. As a result of “Oplan Pagbabago”, we dismissed 64 erring Philippine National Police (PNP) personnel and suspended 71 and charged many of them criminally during this first quarter of 1994 alone.

On another front, we have restored the death penalty for heinous crimes.

We have pursued the improvement of public safety, for we can never equate democracy with disorder.
CHALLENGES OF THE IMMEDIATE FUTURE
Together we have accomplished a great deal. And things do look brighter, with the lights on once again, all over our country. But we still have a long and difficult way to go in our journey toward the good society.

We must sustain the momentum of economic growth by deepening our structural reforms. And we must prepare for and ensure global competitiveness under the new world trade order established by the Uruguay Round of GATT, the General Agreement on Tariffs and Trade.

We have begun opening up key industries — most recently, shipping and insurance — to competition. The other day, I signed Executive Order 185, opening all shipping routes to new operators and new investors. Two weeks ago, I delisted the insurance sector from the industries foreigners may not enter.

Our people have already started to benefit from the opening up of the telecommunications industry; as they soon will from our liberalization of banking, of insurance and shipping. Our efforts to break up cartels and monopolies injurious to the national interest and public welfare will continue unabated.

And as we put in place the reforms by which needed material infrastructures can be accelerated, so must we lay down the infrastructure of democracy — the ways and means for ordinary Filipinos to take part productively in winning the future — for themselves and for the nation.

And this must include raising the national capacity of the Philippine state and Philippine society — to make them invulnerable against the manipulations of self-interest groups and power brokers.

Our democracy is far from perfect — that we all know. But it works sufficiently well — enough for us to improve our situation steadily — without having to resort to authoritarian means. We will develop as a democracy — and prove to the world that the Philippines can achieve sustainable economic growth and provide adequately for the people’s welfare under a democratic framework.

To deepen our democracy, we must remove the barriers to the empowerment of the Filipino poor — our farmers and landless rural workers; our coastal fishermen and our urban slum-dwellers; our indigenous cultural communities; workers in the underground economy; and all our marginalized sectors.

We must provide them with the basic needs for physical survival, and concurrently empower them with the opportunities to develop to the fullest their individual and collective capabilities.
SOCIAL REFORM AND HUMAN DEVELOPMENT
As we move on into the next four years, we will increasingly assert our social reform agenda. After all, we are pursuing growth not for its own sake, but because growth will enable us to achieve — and then maintain — a higher quality of life for all our people.

Economic growth is meaningless without social reform. And social reform without economic growth does no more than redistribute poverty.

Our Social Reform Agenda shall be guided by two principles.

First, social reform must be a steady and continuing — not a once-and-for-all — process that addresses the basic inequities of Philippine society, particularly the wide gap between the rich and the poor.

Second, our social reform agenda shall be defined not by government alone, but by government in partnership with every sector of national society, through consultation and consensus.

Our vision in this sense is simple. It is to grow equitably — and in freedom.
THE ISSUE OF VAT
Let me say a few words about the value-added tax (VAT).

Taxes are part of the price we pay to live in a civilized community. The best that government can do is to make sure the tax burden falls heaviest on those who can best bear it and least on those who are its principal beneficiaries because they are poor.

And this is what the newly expanded value-added tax does. Compared to the multitude of taxes it replaces; it is a progressive tax. Basic commodities such as rice, corn, meat, poultry products, fruits and vegetables are exempted from its coverage. And so are their inputs such as fertilizers and feeds.

I have taken all steps necessary — within the power of the presidency — to exclude items that i believe should be exempted from the coverage of vat. These include wet food items in public markets and supermarkets, the majority of our cooperatives, textbooks, small businesses, small leasees, and small property owners.

On the other hand, the coverage of vat extends to such establishments as hotels, large restaurants, country clubs, car rentals and other luxury outfits that cater to the richer consumers and the more affluent.

VAT penalizes consumption — but not savings. Necessarily, the more well-to-do, who consume more, shall have to pay more taxes. And since VAT replaces an entire regime of sales taxes, it is simpler to administer, particularly since it has built-in mechanisms against tax evasion and tax avoidance.

We all need the increased revenues VAT will bring — to ensure better education and health care for young Filipinos, to unclog traffic jams, to provide socialized housing to a greater number, to eliminate garbage in our streets, to create a sufficient reserve of electric power for industrial growth, and to develop livelihood and job opportunities in the countryside.

On the other hand, let us continue and intensify our dialogues with each other — the pro-VAT and the anti-VAT — in order to find the best solution to our dilemma.

Let us give VAT, which is a law enacted by congress and approved by the president, a chance to work.
AN EMPOWERED NATION
Finally, let me re-emphasize my message to you on Independence Day just three weeks ago:

The modernization of the Filipino nation cannot involve material growth alone.

Modernization must mean a new way of looking at the relationship between people and their government. It is about the participation of ordinary citizens in this great and historic enterprise of national renewal.

Modernization properly means people sharing a belief and commitment in how society should be ordered: for what purposes, and for whose benefit.

The modern Filipino society we envision is one that continues to care for the family, for the poor, the old, the weak, the young and the vulnerable, while insuring the cohesion, competitiveness and strength of the nation as a whole.

Modernization also means raising the political capability of the state: to free it once and for all — from the influence of self-interested economic oligarchies and political dynasties.

It means the elected leaders becoming fully accountable to the governed.

Modernization demands civic responsibility and democratization. It means the country’s business becoming the business of every citizen.

And, above all, modernization means a new national capacity to compete in the international arena, and to hold our heads high, as Filipinos, in the community of nations.

If we are to become a truly modern nation, we must pull and move together, and think and act together — government and citizen alike — for the good of all.

Our protracted crisis has had its uses. We have finally raised from within ourselves the will to change and to overcome crisis. And now that we have tasted the first sweet fruits of reform, made possible because of the exercise of our political will, we should strive to do more.

Reform will continue to be difficult — because its benefits appear only over the medium or long-term, while its social costs are immediately noticeable.

These past 12 months have shown us what we can do. More faith, more courage, and more action would fast-forward the nation into a better future.

Kung nais natin ng isang modernisado at maunlad na bansa, kailangan nating magkaisa, at mag-isip at kumilos nang sama-sama — ang pamahalaan at ang mamamayan — para sa ikabubuti ng lahat.

Namalas natin nitong nakaraang taon — ang pinakamaunlad sa lahat nitong ilang taong lumipas — kung ano ang kaya nating matamo. At mahihigitan pa natin iyan sa higit pang pagtitiwala, higit pang katapangan, at higit pang pagkilos.

Tangkilikin at suportahan ang ating programang “Philippines 2000!!!” upang tayo’y makadating sa masaganang kinabukasan para sa lahat.

Mabuhay ang Pilipinas!

Mabuhay tayong lahat!