Having weathered the recession better than most, the Philippines has renewed confidence in its economy, its government, and itself
Voters in the birthplace of “People power” united at the ballot boxes in May 2010 to overwhelmingly back a new government for the Philippines. The “No corruption, no poverty” campaign led by Benigno Aquino III clearly struck a chord with the electorate, and the new administration has held firm to its pledge to encourage socio-economic growth through accountability, as the president believes greater transparency goes hand-in-hand with poverty alleviation.
The new administration immediately took steps to demonstrate the courage of its convictions to increase institutional transparency by introducing “zero-waste budgeting”, obliging all government agencies to justify their projected expenses, thereby reducing the potential for overspending or corruption.
New investment laws have been designed to provide better guarantees for investors and President Aquino has highlighted key areas with prime investment potential: logistics, mining, shipbuilding, tourism, agro-industry, business process outsourcing (BPO) and information technology (IT), electronics and semiconductors, and energy and electricity.
“We have streamlined business registration, improved power supply, instituted reforms and issued policies to fight corruption, and established closer coordination between the national and local governments to improve the investment climate, even in the countryside,” says President Aquino.
With regard to the private sector, many of Aquino’s ministers have orchestrated a more enterprise-friendly and results-based edge to government policy.
“In the private sector, if you do not produce, you do not eat. We are focused on making things happen and letting our actions speak for themselves,” says Secretary of Finance, Mr Cesar V. Purisima. “The work style of President Aquino is designed for action, not for show. He is really focusing on making sure we are able to execute our programs and ensure optimum performance of cabinet members. Those who do not perform are asked to move on.”
“We have streamlined business registration, improved power supply, instituted reforms and issued policies to fight corruption, and established closer coordination between the national and local governments”
President Benigno Aquino III
Mr Purisima recently won the 2011 Emerging Markets Finance Minister of the Year Award for Asia in recognition of his “strong policy track record and steadfast commitment to maintaining economic stability over the past 12 months.” Emerging Markets’ editor Taimur Ahmad said: “Secretary Purisima’s decisive action upon taking office to enforce greater fiscal discipline allowed the economy to grow strongly last year and to insulate it from heightened market sensitivity to sovereign indebtedness.”
President Aquino’s plan, which is often referred to as “Aquinomics”, is underpinned by four pillars: fiscal sustainability, infrastructure, investing in people, and improving the way business is done in the Philippines.
“On the fiscal and the macroeconomic side we are doing very well,” says Mr Purisima. “We are a net creditor country; our reserves are greater than our debt. We are a BOP (Balance of Payments) surplus country: we make more dollars than we spend. Our reserves are on a historical high and the increase in reserves, which has proven to be sustainable, is structural rather than hot money inflows driven by the BPO industry and overseas remittances.”
Investing in its people is of paramount importance: better educated individuals have higher employment rates and earnings, and produce more relative to those with less education. Therefore, governments have to invest substantial portions of their resources in education with the expectation that benefits will accrue over time, and the Philippines’ government is very anxious to pursue this tack – to have a highly educated workforce going forward.
To improve the country’s infrastructure, the government is targeting public-private partnerships (PPPs) in its bid to become a regional logistics hub. An improved transport network and energy provision would also spur growth in the tourism sector, which has ample room for development given the country’s spectacular natural blessings, and the fact that China’s burgeoning tourist market is virtually next door.
“We have an ambitious PPP program,” says the finance secretary, “but we are making sure we are doing it properly. We have launched the first project already – a toll road called Daang Hari.”
Additionally, the Philippines is geographically located at the heart of what is expected to be one of the fastest growing regions of the next 20 to 30 years. It is on track to be a part of the ASEAN alliance by 2015, an integrated community of more than 600 million people, boasting a GDP in excess of $1.7 trillion. “We will be the northern and Pacific gateway to ASEAN,” adds Mr. Purisima.
Billionaire Roberto V. Ongpin, president and CEO of ISM Communications and a former Minister of Trade and Industry, has vowed to attract more foreign investment into the country. “I have brought in so much investment into this country, and I will keep doing it,” said Ongpin, who heads five publicly-listed companies.
Meanwhile, the Philippines’ long-standing relationship with the United States was strengthened in June this year, when Secretary of Foreign Affairs Albert Ferreros del Rosario met with Secretary of State Hillary Clinton.
Mrs Clinton opened the meeting, affirming: “Whether we are working together to combat extremism, help victims of natural disaster, or stand up for human rights, the people of our countries share a vision of a better world and a mutual desire to take action.”Leading figures in business and politics in the Philippines
Significant moments in history
Jose Rizal Birthday
People Power Revolution
Benigno Aquino III
A Philippine national hero is born. His literary works denounced the conditions of the local population under Spanish rule, inciting revolt against the authorities.
The independence of the Philippine Islands from rule by Spain is declared by revolutionary forces under General Emilio Aguinaldo from his home in Cavite.
The People Power Revolution led by Ninoy and Corazón Aquino triumphs after three years of demonstrations against the fraudulent practices of the Marcos regime.
Benigno Simeon ‘Noynoy’ Cojuangco Aquino III becomes the 15th and current President of the Philippines, succeeding Gloria Macapagal-Arroyo before him.