Speech of President Arroyo during a Breakfast with Canadian-Filipino Business Leaders

Her Excellency Gloria Macapagal-Arroyo
President of the Philippines
During a Breakfast with Canadian-Filipino Business Leaders

[Delivered at the Ballroom, Chateau Laurier, Ottawa, Canada, January 30, 2002]

Thank you very much Secretary Alvarez.

Before anything I would like to first greet our most prominent Filipino-Canadian, the Minister of Veterans Affairs Rey Pagtakhan. Before this he was Canada’s Secretary of Foreign Affairs for Asia-Pacific. And we have plenty of time … Opportunities to see him because the Philippines was part of the scope of his work. But now he is a full Minister for Veterans Affairs. His … Be around Canada. We will miss him but we are very proud to have a member of the cabinet, a Filipino here in Canada. Congratulations, Rey. I would like to greet also Ambassador Benedicto; Ambassador Collete.

And to introduce to you if they had not been introduced earlier, the members of our official delegation. We have the Senate President Pro-Tempore Mr. Manuel Villar, Senator Ralph Recto; from the House of Representatives we have Congresswoman Cynthia Villar, Congressman Alipio Badelles who is the Chairman of the House Panel of the Committee on Energy that did the implementing rules for the energy presentation that we made today. We have Congressman Plaridel Abaya; Congressman Edmundo Reyes; Congressman Ed Zialcita. From the local governments we have from the Autonomous Region of Muslim Mindanao, the regional Governor Parouk Hussin; from Quezon Wilfredo Enverga, Governor; from Bulacan, Governor Josefina Dela Cruz; and from the City of Antipolo Mayor Angelito Gatlabayan; for our Cabinet Dante Canlas, Rigoberto Tiglao; well, you’ve met Secretary Alvarez but I understand earlier Undersecretary Domingo already made a presentation before you; and we have the Senior Deputy Minister of Foreign Affairs Lauro Baja; members of the Philippine and Canadian Business Community; distinguished guests, ladies and gentlemen:

I am pleased to be here with you today and I thank Ambassador Benedicto for hosting this forum. The Philippines and Canada share a long history of political, social, and commercial relations. And we are strong allies today more than ever in the fight against global terrorism and poverty. The Philippines has a special bond with Canada arising from 320,000 Filipinos headed by our cabinet minister here whom you have welcomed as immigrants. We are very proud of our Filipino-Canadians who are contributing their share to the growth of the Canadian economy. Canada also has always been a strong supporter of our efforts to improve the quality of life of our people through its generous development assistance under the Canadian international development agency, or CIDA. One of the agreements that were signed this morning was enabled by the assistance program of CIDA for small and medium enterprises.

Our economic relations are deep, solid, and as minister … Said, robust.

Looking back to the distant past, Sunlife established an office in Manila over a century ago in 1895. Sunlife and Manulife have been in the Philippines for more than 90 years.

And on a contemporary note, Prime Minister Chretien accompanied his team Canada business delegation to the Philippines in January 1997, where 31 million dollars in commercial contracts and 469 million dollars in business agreements were signed. And today we had six more signings. In November of that year, 1997, the team Philippines business delegation also visited Canada and a total of 1.4 billion dollars-worth of agreements were signed. Today team Philippines is here again.

Truly since those mission in 1997 Philippine-Canadian business relations have continued to grow even more.

Total trade between our two countries is more than a billion dollars and it has been increasing from 1997 up to today, it is larger by 45 percent. And last month, SNC Lavalin, whose President we had breakfast with this morning, one of Canada’s leaders in engineering and construction, signed an implementation agreement worth one billion Canadian dollars to finance, design and construct a light rail transit extension to the suburbs of Manila going to the province of Congressman Abaya. In fact your district, right Congressman? Yes. The deal represents one of the biggest agreements signed in Philippine-Canadian history.

Indeed, this is a good time to expand our trade and investment relations.

Since I assumed the presidency a year ago, we have made progress. Where richer and bigger economies failed, ours has moved forward.

I’m very glad that today my economic planning minister sent me our statistics for our GNP growth rate that has just come out. For the year 2001 our GDP grew at 3.4 percent, our GNP grew at 3.7 percent in a sea of economies that we are growing at negative or zero percent. And therefore our growth rate for 2001 was one of the highest in the world and we are very proud of that. Where bigger and stronger currencies collapsed, ours has held firm.

In fact earlier, at breakfast one of the Canadian big businessmen said that because there were devaluations last year, the year before during the period of the last days, the last month of President Estrada, they were afraid of where our currency would go. Well it has gone and stayed where it should be so it has been stable during this past year and in fact stable just by our own efforts not by getting any support from any external source to finance our exchange rate.

When I was in Washington the IMF told me that I was the only president who became president under unusual circumstances who did not ask for an IMF program and yet our exchange rate remained stable.

Indeed, we have gone a long way to bringing our country back on the radar screens of the world. A new Cabinet, some of whom you see here, picked as much for their integrity as for their competence and qualifications, has brought professionalism in public service to new heights. Just to give an example of professionalism, I have seven Harvard graduates — one of them is my secretary of environment — three Wharton graduates and four veterans of Wall Street. I still have to see another government with that kind of Cabinet composition.

Much of what the world’s investment community has asked of us, we have thus far delivered. The Power Bill — and I must thank Congressman Badelles for his work there — the money laundering act. Those two laws were long considered litmus tests of our political will to legislate reforms, they were put into law, firmly overcoming years of delay. For instance, in the case of the power bill, it got passed into law after nine years of long wait. Our public deficit has been placed under control.

Interest rates and inflation rates have declined. Our interest rates are at their lowest in the last 15 years. As for our inflation rate it’s more than six percent when I became president, now it is down to 3.9 percent.

Even recent unemployment rates have shown decline. When I first became president the unemployment rate was 11.6 percent and after nine months of my presidency it went down to 9.8 percent, and we are working to bring it down even more.

Several financial institutions have lined up to strengthen our banking industry.

Foreign direct investment levels have also exceeded targets during 2001. I will not tell you the numbers because Undersecretary Domingo has already given them in his briefing.

Leading international credit rating agencies and multilateral bodies such as NEXI, JBIC, the World Bank, and the Asian Development Bank have all responded by endorsing our enhanced credit worthiness. J.P. Morgan reports that the prevailing decline in risk aversion has allowed the continuous improvement in economic fundamentals in the Philippines to finally shine through.

Even less generous rating agencies like Salomon Smith Barney in its January-February 2002 credit research says: “increasing risk appetite in 2002 should favor the Philippines among Asian sovereigns.”

“We expect the Philippines’ ratings to stay on the balance in 1ho2.” In other words, first half of 2002.

Salomon Smith Barney also characterizes the Philippines as “gaining momentum.”

It recognizes that, “economic growth has been resilient thanks largely thanks to strong personal consumption and some well-performing agriculture and service sectors … This could be bolstered by the government’s growing credibility in the eyes of foreign investors … Given the government’s commendable performance in 2001, we expect it should stay close to its more difficult targets in 2002.”

I think that Salomon was being very conservative when it said some well-performing service sectors because our figures just showed for instance telecommunications growing at 20 percent, business services including I.T. services grew at what Dante, seven percent. And when they said it was bolstered by strong consumption they were probably looking at our first half growth because our full year growth is an investment-led growth. And investment-led growth is certainly more sustainable than consumption-led growth.

In April 2000, a survey of the political and economic risk consultancy ranked the Philippines number one in offering the best quality of life for expatriates in Asia.

Indeed, the Philippines offers a productive environment for business people. Overall, we offer lower business costs. In the Philippines, multinational companies can expect as much as 40 percent cost savings for their operations versus average cost in North America and Europe.

The Philippines has several modern industrial estates, economic zones, as well as dedicated I.T parks and cyberparks with reliable physical and telecommunications infrastructure.

When I first became president and I talked about promoting I.T. I said one of the areas of concerns we should work on is the physical infrastructure because we need to promote inter connectivity at low cost.

When I went to New York last November there were so many call centers, memorandum of agreement signed and the investors told me the reason why they are going to the Philippines is because they like the infrastructure. We have good broadband facilities in the Philippines so therefore what we aim to do when I became president in January apparently we have not succeeded enough by November to bring the investors there for I.T.

The Philippines also offers attractive investments to investors and my administration is committed to work with Congress once again — and the Congressmen are here — to further enhance these investment incentives.

We realize of course that work remains to be done:

We are working with the international community to root out terrorism, including the terrorism in an isolated island in Southwestern Philippines.

We are committed to return the reputation of Manila and the Philippines as a welcoming and safe place in which to live and do business.

We are increasing the benefits from our new global relevance and engagement after years of being isolated and adrift.

To promote urban peace and order, the Philippine National Police last month increased its visibility by hiring 1,700 new policemen for metro manila alone, all college graduates, all highly professional.

We are determined to promote efficient and transparent governance. Under the leadership of my cabinet members, government agencies are implementing measures to cut in half the number of signatures required for the delivery of services such as licenses, permits, registration and franchises.

Our local governments — and we have two governors and one city mayor here — have likewise agreed to streamline and slash red tape in order to provide seamless efforts between national and local governments to be investor-friendly.

Today earlier you had briefings on I.T. and energy. Let us focus on some examples including those of trade and investment sectors that offer the brightest opportunities for Canadian businessmen.

Well our 20 percent increase in telecommunications and our seven percent increase in business services including I.T. show a result of a policy to promote fast-growing industries where high-value jobs are most plentiful and which can use our most competitive resource — the great Filipino worker. We are the third largest English speaking country in the world. We have a workforce that is I.T.-literate and multi-skilled. We have a large labor pool with an educational sector churning out 400,000 college graduates a year, 40,000 of these being knowledge workers like engineers and I.T. professionals.

Filipino professionals are known for having the fastest learning curve of only eight weeks to learn technical skills.

With its highly skilled and highly trainable labor force, the Philippines is an ideal outsourcing partner for I.T. services. We have already enacted an e-commerce law, a first in Asia. The law regulates the use of electronic technology and penalizes cybercrimes such as hacking, even as more bills are in the pipeline to address the other security issues and also to promote convergence. And I am pleased to announce that the Philippines will be hosting — I think I has been announced earlier but I want to stress this — a major I.T. services fair next month in Manila. And I would like to invite our Canadian friends to visit this fair.

The other area — the 20 percent growing sector — telecommunications, we are promoting investments in physical infrastructure for high-speed connectivity at low cost, as I said. We are also establishing municipal telecommunications centers and working with mobile phone producers to disperse cell sites to make their services available all over the country. The Philippines has 7,100 islands, this certainly offers solid opportunities for wireless telecommunications infrastructure.

I was so glad to see a memorandum of agreement on tour packages for the Philippines because tourism is also a growing sector in the Philippines. We are developing eco-tourism and beach tourism sites and projects in particular.

And related to agribusiness, my administration is committed to bring about countryside development through a modernized and socially equitable agricultural sector. Here, opportunities for technology transfer in animal breeding stocks, food processing equipment, organic products and irrigation technology are available for investment areas.

Opportunities also lie in the energy sector as you have heard earlier in the briefing. As you know by now, I hope, we have an Omnibus Power law enacted last year after nine long years of wait to privatize the state-owned national power corporation, break the monopoly of power generation and transmission and to develop electricity in rural areas. This offers solid investment opportunities for Canadian firms that have excelled both in generation and transmission in the power sector.

We will be having the bidding for a transmission company in June of this year. And that investment is worth two billion dollars.

In the area of infrastructure, we are looking at private sector development of our mass transit systems. This is one of the areas where Canadian expertise in engineering and transportation infrastructure certainly is welcome. We are also expanding and modernizing our airports and seaports, creating opportunities for Canadian investments in design, construction, and equipment.

Housing construction, earlier we had a signing, for, what, 3,000 houses in Pampanga, my province. Housing also presents business opportunities: as low-cost housing is one of our key priorities, we want to build 100,000 low cost housing for the working class every year. This offers opportunities for Canadian housing technology if it is inexpensive, innovative and adaptable to a tropical climate.

Indeed, this is the time to capitalize on the deepening convergence of Philippine and Canadian interests by strengthening our commercial relations. I’m sure that as we have been friends commercially, culturally for so long now, over a century, this time in the 21st century, together, we can weather the storm of global recession and achieve mutually profitable alliances.

Thank you.

Source: www.op.gov.ph

Macapagal-Arroyo, G. (2002). PGMA’s Speech during a Breakfast with Canadian-Filipino Business Leaders. Retrieved from https://web.archive.org/web/20100412230922/http://www.op.gov.ph/index.php?option=com_content&task=view&id=7583&Itemid=38