Tuesday, March 3, 2009

Great Speeches: On Competitiveness

Let me begin by thanking and congratulating Tom Aquino, Cesar Bautista and Bobby Romulo, together with Peter and Pooch Macaranas for the very successful organization of this summit.

And to all of you good morning!

We are all here today because we recognize one very important fact: the world is moving at breakneck speed and we must compete or get left behind.

On a macro level, we know political instability and weak fundamentals have historically undermined our ability to compete. At the microeconomic level, under investment in infrastructure, too much red tape and too many opportunities for corruption, among others, all add to the cost of doing business.

This is why at the beginning of our administration, we placed priority on strengthening our economic fundamentals. Since then many areas have dramatically improved, notably revenue generation, solid fiscal stability and a new round of government investment in infrastructure. Jobs are being created and investment is coming in at a good clip.

Inflation is now at its lowest in recent years, signaling payback time for our people. Our resolve to implement tough reforms and the resilience of the people to surmount every crisis and challenge have paved the way for a stronger economy ready for take off. Political and economic stability are held up by a confident market driven by good governance, free enterprise and social justice. What we've been achieving now is a tribute to the Filipino spirit that has remained unswervingly focused on going for the gold in every field of enterprise and excellence.

Having said that however, as we've all agreed and as Tom presented, we all agree that there is still much to do.

Now, we must also pay greater attention to those factors that affect productivity and the cost of doing business which impact on your ability to compete on a level playing field without need of artificial measures like subsidies and protection to cover up for our deficiencies.

This competitiveness summit is about taking the challenge head on and proving to ourselves, our nation and the world that the Philippines means business.

We need to improve our infrastructure and our regulatory regime so that goods and people move cheaply and freely by road, rail, sea or air and have access to cheap power and world class telecommunications.

And human resources must be on the frontline of our competitive comeback, and nothing is more important than the health of our children and a quality education. And at no time in our history has the need for improved technical, engineering and science skills ever been more important. And never has the mastery of the english language been more important to our national well-being.

And all of these actions are not just pipe dreams -- we can make them happen.

Just over a month ago we held a BPO strategic planning session in Cebu. Five years ago, BPO and call centers barely existed. You could count the jobs on a few hands -- less than 2,000 of them. Today, we could pack several stadiums full of the 200,000 Filipino workers who earn a proud and rewarding living in the call center and BPO industry.

The team of professionals and experts that advised me in Cebu believes this industry can produce an increasing numbers of jobs -- half a million or more -- and help solidify our position as one of the best places to do business in the world.

In the BPO space, we aim to forge ahead and invest in our future to become a genuine world leader. I was delighted to learn from Polly Nazareno of PLDT that the Business Process Association of the Philippines or BPAP has initiated a program to strengthen itself to be on par with its powerful peer group, NASSCOM in India. In fact, BPAP and NASSCOM have announced a new MOU to increase coordination and cooperation between the two entities. This MOU combined with BPAP's own private-public sector partnership to bring the BPO industry to the next level here in the Philippines is something to be proud of.

I mention the BPO industry because very few places in the world can you expect an industry to grow one hundred times in five years. But there are other industries that have been having their own share of public-private sector partnership.

The SEIPI, the Semiconductor and Electronics Industries in the Philippines has its own public-private sector initiative. With DOST, it supports 60 MS and PHD students to enable the industry also to move up the value chain the way we're trying to do it with BPO. And with PEZA, SEIPI developed the advance research and competency development institute which caters to the continuous training and education of the industry's workers.

In the automotive industry, more local assemblers, I hope, will be able to join the automotive exports program. They are expecting more assemblers to join this program once the BOI expands the program to allow low-volume but high-value exports of completely built-up units. Because right now, only Ford Motor Philippines has been able to avail of the program because of the large volume requirements.

And another thing we can look forward to is the manufacture of flexible-fuel vehicles. This certainly requires private-public sector partnership. In fact not only in the Philippines but in the region.

When I spoke in the ASEAN-European Summit in Helsinki, I was the speaker on energy and we talked about flexible fuels. We talked about the vehicles that can handle flexible fuels. And of course to be able to have Ford, for instance, have enough volume to produce, the different countries must have the same fuel standards of combination of the blends. So that really requires private and public sector partnership.

Going back to the BPO, we made a difference because government and business worked together to provide the business environment through incentives and the technology backbone through strategic investment to make us globally competitive. We're trying to do that with SEIPI, with the automotive industry. And with the same determination, we will build our logistic hubs, liberalize our skies, grow our medical tourism industry -- mentioned in Tom Aquino's presentation -- expand our export manufacturing base and become value-added providers of agricultural products to the region and the world.

I thank you for the commitment from the private sector that Donald handed me, and on the part of the government, we pledge to you today the political will to keep our economy on track, our budget on plan, and our government focused on becoming more business friendly.

On the part of the legislature, let's all hope they can pledge the same unwavering support to pass the necessary legislation. Junie Cua, the chairman of trade and industry of Congress, has certainly been doing his part.

The private sector creates the jobs; you are the engine of economic growth. Our job in government is to help invest in the people and institutions of government, to give our citizens the tools they need to compete and win in the global economy. And we want to thank all the government and business stakeholders that are participating in this summit consultation process.

I understand from Peter that over three dozen recommendations have been put forth today by our joint public-private task force on competitiveness. Each and every recommendation must move forward. No action is too small, no aspiration too big, if it will help catapult us to higher performance.

To that end, we hope this summit ushers in a new day of renewed coordination between the best and the brightest of our business community and our government leaders. We need a fast start and tough but achievable goals to jumpstart our efforts.

I remember when I was in the Department of Trade and Industry at the time when Raul Boncan was my boss, he would tell us in planning: "If you're going to put something that you can easily achieve, that's not tough, that's not a target, that's a projection. So what you have... A target is something that is tough but achievable." And that I think is what we are aiming to do today.

For my part today I'd like to announce what we've done so far. An administrative order institutionalizing quality management system in government; a memorandum order directing all departments, bureaus, commissions, agencies, offices and instrumentalities of the national government to improve transaction costs and flows in order to enhance Philippine competitiveness; a memorandum directing DOTC to provide seamless infrastructure networks to enhance Philippine competitiveness; a memorandum directing DOE, PNOC and NPC to lower the cost of and ensure self-sufficiency in energy to enhance Philippine competitiveness; and a memorandum directing DEPED, CHED and TESDA to develop programs to improve the student proficiency in English, Science and Math in order to enhance Philippine competitiveness. This is the start of a unified national campaign to bring us together around a common goal: to accelerate development, investment and growth.

Of the three dozen or more recommendations, as they were being reported to me by Tom as the consultations were progressing, I want to highlight three today:

One, a recommendation to the league of city mayors to set a target that 50 percent of them will be ISO certified within the next two years. Cooperation of the league. This initiative will bring down the barriers of red tape, increase government efficiency and opening up the door to doing business more easily at the local level where jobs and wealth need to be created.

Second, by 2010, we want prioritization of Math, Science and English in our schools -- actually, we've done that. But this is the additional tough one, by 2010, a 30 percent improvement in English by all high school seniors.

Third, we want three times more investment by government and business in strategic infrastructure in the year 2007. Well, now we can do it because we have the money on the government side, and you've shortened my list, my SONA list to 20 priority projects. And if we cut down on red tape and do all the things needed for competitiveness, then the private sector can very well participate in building this infrastructure by 2007.

We need this infrastructure. Our people form the competitive core of our natural resources and modern, world class infrastructure forms the backbone.

Aside from these three important recommendations that I digested from the summaries that Tom Aquino was reporting to us periodically, additionally, I would like to acknowledge, the number one recommendation of the foreign chambers yesterday and that is regarding constitutional and legal restrictions on foreign direct investments.

But today's summit is not a one-time event. It's a continuing process. In this regard, I have signed an executive order creating a task force on Philippine competitiveness. This task force, including the secretariat, should be composed of representatives from both the public and the private sector. Their job will be to make sure that our resolutions in this summit will be carried out over the years until the end of our administration.

And so given that this is a continuing job, let me end by saying that in this continuing process of achieving competitiveness, this President is always willing to listen to new ideas and new ways of doing things.

Thank you.

We are that our drive to become one of the best is not without risks and consequences. Just recently,

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