Aquino tells investors: 'Economic gains prove my priorities right'
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MANILA, Philippines – (UPDATED 3:48 PM) If he were just "Noynoying", as his critics say, then the country must have been running on auto-pilot for the past year. It was a confident President Benigno Aquino III who faced investors and global players in a Euromoney forum on Tuesday, insisting that recent positive developments have proven him right in his priorities: by focusing first on good governance, the Philippines has gotten a good bill of health for doing business.
By focusing first on making people liable and charging them in court - amid concern he was being more vindictive than focused on priming the economy - Aquino noted how political will for reforms can lead to concrete gains, and outlined the rest of his agenda.
He pointed to the record performance of the stock market, the country's rise in the World Economic Forum’s competitiveness index, the glowing seal of approval from the Japan External Trade Organization, the rising PEZA investments, and the enthusiasm for Philippine bonds, as prime examples.
From here, he said, the country is now poised for greater growth as it pours most of its resources on three crucial sectors: agriculture, infrastructure and tourism.
"Let no one doubt that we are doing the three things which were previously thought of as impossible: we are calling people to account; we are putting closure to the controversies that had sapped our institutions of their vigor and had diminished their legitimacy in the eyes of our countrymen; in other words, we are exercising political will.
"We have reformed the manner in which we allocate and dispense public funds; we have thrown the book at the thieves; and we are collecting what the government is due. That is how we are fighting corruption, and making a mark.
"We have fought the culture of naysaying and negativity, and have given a sense of empowerment to our people, replacing the hopelessness of the past with a steadfast commitment to building a society that works. We have put an end to business as usual and proclaimed a country open for real business,” Aquino told the Euromoney’s Philippine Investment Forum at the Manila Peninsula.
Country's healing has begun
Taking off from the biblical injunction of “Physician, Heal Thyself,” Aquino said the serious efforts to redress wrongdoing and abuse in the past had started to bear fruit, and added the government will seize the momentum to push the three crucial sectors cited above.
“All it took was faith-healing to invoke, in political terms,” the biblical injunction and thus weed out corruption or at least plug the gaps that allow it to grow, Aquino said, adding that “this, simply, has done wonders for our economy.”
He cited the Philippine Stock Exchange index breaking the 4,000 barrier, a matter barely even imagined two years ago. “Now, we have breached not just 4,000, but 5,000 as well. The PSEi closed at another record high just 11 days ago at 5,145.89 points. For those of you keeping score: that’s 21 record highs in the 21 months of our administration.”
He noted as well how “respected international organizations have also given us the thumbs up sign.” The World Economic Forum “bumped the Philippines 10 places up—from 85th to 75th—in their latest Competitiveness Index.”
And JETRO, after conducting a survey among companies in the region, “named us the best place to do business in Asia-Oceania, whether in manufacturing or service.”
Global banker HSBC “even recently predicted that, by the year 2050, we will be the sixteenth largest economy in the world. And these are only a few of the companies and organizations that have already changed their mind about the Philippines—and have been very vocal about it.”
Record investments, appetite for bonds
Meanwhile, Aquino said such “renewed confidence from the global community has reflected itself in real pesos and centavos invested in the country.” He reported that P449.7 billion in investments have been registered in the Philippine Economic Zone Authority since July 2010---roughly 22 percent of all investments in PEZA since it was established in 1995.
In 2011, PEZA-approved foreign direct investments grew by 30.6 percent to P256.1 billion, the highest in 16 years.
As for performance in the bond market, Aquino noted that in January of this year, “we issued $1.5 billion in global bonds with a coupon rate of five percent—the lowest for an Asian sovereign for that tenor, and at better rates than several other investment grade sovereigns like Indonesia, Mexico, Brazil, and even some EU countries like Spain.”
All the salutary developments are happening amid global economic uncertainty, he stressed.
This year, the President said, the plan involves focusing on three specific sectors with the “largest impact on our economy, and in the lives of our people—that will create much-needed jobs in the timeliest manner, namely: agriculture, infrastructure, and tourism.”
Philippine farmers account for 33 percent of total employment, but only account for 13 percent of GDP. His administration “fully intends to increase farmer productivity and help facilitate the trade of produce,” said Aquino.
The Department of Agriculture budget was increased by more than 50 percent to P53.3 billion, the bulk of which will go to more irrigation projects, more farm-to-market roads, and more buying posts—projects that he said will “directly impact the lives of those who find their livelihoods in agriculture, and will move us closer to our goal of reaching rice self-sufficiency in 2013, which we believe extremely doable.”
As of March 15, the Department of Public Works and Highways has bidded out nearly 90 percent of their 2,128 projects worth P63 billion this year. And 91 percent of these projects have already been issued notices to proceed. “And we are confident that, very soon, we will reach 100 percent,” added the President.
He drew attention to last week’s approval of P133 billion worth of projects for different sectors, notably the LRT Line 1 South Extension Project, worth P61.53 billion.
As for tourism, he described the sector as “a low-lying fruit for the Philippine economy that has long gone unpicked.” He thanked new Tourism Secretary Mon Jimenez and “an excellent marketing campaign, coupled with a liberalized aviation industry” for recent gains in the sector. In January alone, the Philippines welcomed more than 400,000 visitors, “the highest monthly visitor count in our history.”
If such is sustained, said Aquino, “ the Philippines can meet its goal to “welcome almost 4.8 million visitors this year,” still quite a way from the target of 10 million yearly visitors by 2016, but already a vast improvement from projections made two years ago of just 3 million visitors a year.
Level field, cut graft, curb inefficiency
“From the beginning, the secret to our success has been simple: we want to make it easier for people to do business here; and that means creating a level playing field, curbing corruption, and eliminating inefficiencies,” Aquino told the forum.
“The bottom line here is: if we want businesses to set up shop here and create jobs for our people, we have to be competitive. We have to focus on industries where there are actual opportunities for mutual benefit. The world is getting increasingly smaller, and we find ourselves pitted against countries who have very competitive business propositions. We cannot compromise our position by making life more difficult for companies because of corruption or red tape. We cannot sacrifice the jobs created by these businesses, because it is our people who will take the brunt of the hit if these businesses choose to operate elsewhere. We need to continue fostering a good environment for business—one that is both stable and predictable.”
He assured the audience that “this belief will always be a core principle of our administration; and I invite all of you to ride this wave of optimism early, and invest in our country, be it in agriculture, infrastructure, tourism, or any other sector.”
While the red carpet is rolled out for investors, however, Aquino stressed the government will at all times be aware of the lot of ordinary Filipinos, “our ultimate shareholders” in whose interest “we are bound to work.”
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