Philippines Investment Forum 2015-PNoy-Speech

His Excellency Benigno S. Aquino III
President of the Philippines
At the Philippines Investment Forum

[Delivered at the Peninsula Manila Hotel, Makati City, on March 24, 2015]

Every year, without fail, I receive an invitation to speak at this forum, and every year, without fail, I accept. The first Philippines Investment Forum took place about a year and a half into my presidency. Since then, this has become a valuable opportunity for me to share the progress our country has made. Here, we have been able to trace the success story that is the Philippine economy.

There has been so much good news these past few years, and yet, this good news has often been relegated to the back pages of our broadsheets. I must admit: our campaign to change the mindset that negativism sells is still a work in progress. While it is true that we have had our share of setbacks and challenges; we also have an impressive number of achievements under our belt. This is why I have made it a point to spread the good news, and why I am always thankful for those who stay balanced and constructive: pointing out areas in which we can improve, while also acknowledging our progress.

Mr. Shale gave a few examples of our success in his remarks earlier. Perhaps I can also provide a little more data: 2014 was indeed a banner year for net FDIs, reaching an all-time high of $6.2 billion, 65.9 percent higher than what we received in 2013. We have likewise posted impressive growth: from 2010 to 2013, the Philippines averaged a GDP growth of 6.3 percent. Compare this to the previous three-year period, under my predecessor, where growth was just at 4.3 percent. On top of this: even in spite of the lingering effects of Typhoon Haiyan and the uncertainty in the global economy, our country still posted a respectable 6.1-percent GDP growth figure last year.

The Philippines was likewise upgraded to investment grade by all three major credit ratings agencies in 2013, and has continued to receive upgrades since. We are indeed making history. All these, and many other factors, have led to even greater optimism for our country’s prospects. Just to give you one example: Bloomberg recently reported, I’m told, that the Philippines is forecasted to be the world’s second fastest growing economy in 2015.

The tremendous amount of confidence the global community has developed for the Philippines is incredibly gratifying, especially considering that, not too long ago, we were known as the “Sick Man of Asia.” However, our administration remains hard at work so that we can maximize every opportunity available to us, and I think many of you will agree with me when I say: You ain’t seen nothing yet.

Infrastructure is one of the sectors that has greatly benefited from our drive to become more competitive. Through the efforts of our Department of Public Works and Highways, corruption has been vastly minimized, if not eradicated, and projects are now regularly completed ahead of time and under budget, including those started by past administrations. The good news is that the DPWH’s budget has more than tripled: from P165 billion in 2010, to almost P570 billion in 2015. We can expect this to grow even more, as our goal is to have infrastructure spending comprise five percent of GDP by 2016.

We are also pursuing another path towards accelerating infrastructure development in the Philippines, namely, the public-private partnerships program [PPP]. Thanks to the good work of those in the Public Private Partnership Center, we have proved to be exceedingly efficient in executing PPP projects. If you will allow me to make a quick comparison: The past three administrations combined were only able to complete six solicited PPP projects. On the other hand, under our administration, nine projects have been awarded; 16 are in the process of being bid out; and more than 30 other projects are under various stages of development.

Another sector we have focused on is that of power, which, for the longest time, has been rather complicated, to say the least. Rest assured: we share your concern. Right now, the Philippines has a total dependable capacity of 15,665 MW, which is—or should be—sufficient to meet our highest projected demand level of 10,222 MW for 2015. But we cannot be content with this, especially with the potential power supply gap in Luzon this summer, due to the threat of El Niño and rehabilitation of the Malampaya gas field.

Government has been pursuing an entire menu of options to address this projected shortfall. We are expediting the rehabilitation of the 300 MW Malaya Thermal Power Plant Unit 1 to help augment power supply in Luzon. We are also requesting the National Grid Corporation of the Philippines to optimize the dispatch of hydropower plants, which will generate additional energy supply during peak hours. Partnerships with the private sector have also proved useful: Under the Interruptible Load Program, as of January 2015, 252 participants have signed up to use their own generators and de-load a total of 688.67 megawatts during times when power supply is too tight.

The good news is that a total of 48 committed incoming power projects with 4,693.6 megawatts of power are expected to come online between now and 2018. Out of these 48 power plants, 21 will be from renewable energy, in line with our goal of diversifying our energy mix and building a power supply that is as clean and reasonably priced as possible. As you can see, we are determined to continue treading green pathways to development, and to maintain our status as one of the driving forces for clean energy in the region. As I have said before, our vulnerabilities to climate risk should not keep us from exerting maximum efforts in pursuing non-conventional sources of energy. We are hopeful that the rest of the world will see the value in such a strategy.

These kinds of efforts are even more crucial, in light of the realization of the ASEAN Economic Community [AEC], expected to take place further this year. ASEAN is a formidable economic force. At a time where many countries in the world are experiencing economic uncertainty, it has remained one of the world’s fastest growing regions. On top of this, one must consider its size: If ASEAN were just one country, it would be a 2.4-trillion dollar economy. This is precisely why, as ASEAN integration takes full effect, the Philippines is taking every possible measure to take on a more dynamic economic role in the region.

Our compliance rate in the AEC scorecard in terms of our commitments to AEC 2015 is now at around 86 percent. I have already signed crucial laws that will help us meet our financial integration commitments, including an Act Strengthening the Insurance Industry and the Act Allowing the Full Entry of Foreign Banks in the Philippines. Moving forward, we will continue expanding the range of financial tools available in our country, so we can maximize the advantages of integration.

Widening the range of financial options in the country also helps another key sector: that of micro, small, and medium enterprises [MSMEs]. An empowered MSME sector is one of the main foundations of a healthy economy: It enables us to establish economic dynamos in even the most remote parts of the nation; it creates opportunities, giving our countrymen yet another path through which they can take hold of their destinies. Ultimately, it can become one of the strongest and most direct tools towards inclusive growth, and thus, we want MSMEs to take on a leading role in our country’s growth story.

This is why we have been working overtime to provide MSMEs the wherewithal to compete and succeed in an increasingly global market. For instance, our SME Roving Academy has conducted more than 1,871 training sessions focused on skills training, product pricing and costing, business planning, entrepreneurship development, and financial management, among many others. To date, these have helped more than 85,000 potential and established entrepreneurs.

Last year, I also signed the Go Negosyo Act along with its implementing rules and regulations. Through these, we have started putting up what we call “Negosyo Centers,” or business centers, that will offer MSMEs a full range of services, including business registration processing, training sessions and seminars, and the establishment of market linkages. By the end of this year, we intend on putting up 100 of these establishments across the archipelago.

Rest assured, our administration will do everything in its power to build on our economic momentum by continuing to invest in the Filipino people. In the past four years and eight months, we have gained the fiscal space necessary to double the budget of our Department of Education, more than triple the budget of our Department of Health, and increase the budget of our Department of Social Welfare and Development by more than seven times, all without raising taxes, apart from the sin tax. We have begun to see the results of our investments in our people. In fact, this year, we will witness the fruits of our decision to expand the DSWD’s conditional cash transfer program to include families with high-school aged children. According to the Philippine Institute for Development Studies, high school graduates earn 40 percent more than a person who only graduates from grade school. Under the expanded CCT program, the first batch of children in assisted families will be graduating from high school this month, which will help lay the foundations for a better future for them.

As I have stated time and again, our greatest resource is our people, and we will continue to channel funds to programs that have the twin effects of creating a skilled, talented, and healthy work force that can attract more investors, and more importantly, of allowing our people to retake control of their destinies.

Today, as all of us in this hall look to the future, there is indeed much reason for optimism. By nearly all available measures—be it GDP, global competitiveness rankings, or credit ratings—the Philippines is poised for even more success. There is, however, one aspect of our country that has yet to be sufficiently measured, and that is the limitless potential of our people, who have been the lifeblood of our success.

These past few years, our people have proven themselves to the world. But having been exposed to the skill, talent, loyalty, and resilience of so many of our countrymen, I know that we have only scratched the surface. I am thankful that all of you are here today, whether it is those who have already invested in this country, or those who have just taken the first step. To those who are here to take a closer look at the Philippines, I invite you: Bet on the Filipino people, and discover for yourself how it’s more fun and more profitable to do business in the Philippines. If, on the other hand, you decline this invitation, perhaps I may pose a question, how confident are you that you will never say: we missed such a good opportunity? Together, I am convinced that we can work to accelerate this country’s performance, and propel it to even greater heights.

Thank you for your kind attention. Good day.