The author graduated from the University of the Philippines, Diliman, Quezon City, with a degree in Political Science. His undergraduate thesis about poverty, the homeless, and squatting in the Philippines shows that such problems, which was present since the dawn of time, would require a change not only in laws and policies, but also the frame of mind of the Filipino, in order to solve them.
He has a degree in Law at UE Manila, and is now working at the Philippine Chamber of Commerce and Industry as Manager of the Advocacy Department. He spends most of his time writing speeches, novels, posting notes in his blogs, and managing and developing programs and projects for the business sector in the Philippines.
The author is also an avid computer geek who has started dismantling computers since he was young in the 1980s. He can install video cards and sound cards even if the computer is turned on. Fortunately, he has never been electrocuted or physically hurt or damaged. Sadly, we cannot say the same for the computers he "fixed." His adventurous whims gave him advanced knowledge in the intricacies of computer world.
His expertise in computers made him adept in handling cellphones because of the similarity in desktop framework. He has silently followed his hobby of pursuing technological breakthroughs by buying second hand cellphones in the outskirts of Quiapo and Caloocan where these gadgets abound.
While he may be fond of online computer games, the last he played them were during the earlier versions of Starcraft, Warcraft, and Diablo I, II, and III. He also likes to listen to Metallica, The Cranberries, Green Day, and several other songs, the singers of which he does not give a care about in the world.
Mr. Domingo was also a member of the call center industry for two years where he was able to master the art of calming and pacifying an irate subscriber.
Sunday, April 26, 2009
Great Speeches: Business Responds to the Crisis by Emmanuel T. Domingo
Never has the world seen, since the Great Depression of the 1930s, the global economy drastically slowing down and contracting, with both developed and developing countries greatly affected. Trade, which is considered to be one of the most important engines of global growth, has drastically been cut as a result of lower consumer demand and lack of access to credit.
With the advent of the crisis, business leaders and government managers are scrambling to develop and craft economic strategies and roadmaps responsive enough to save our ailing industries and generate more jobs for society’s most vulnerable sectors.
The two near- term challenges faced by the Philippines now are safeguarding the achievement of recent years (including stronger growth momentum and progress in fiscal management) and protecting society’s most exposed groups during the slowdown. The second means helping those who have lost, and are in danger of losing, their jobs due to company closures and retrenchments.
Needless to say, difficult times require innovative solutions and strategies which business must develop in these trying times. It is important for businesses to think proactively. Every businessman who wants to survive needs more than strategies for competitiveness. Business needs to create realizable, long-term plans to ensure our sustainability and survival. Faced with uncertainties, several businesses have to shape up and attain unparalleled efficiency to keep them above water. Businessmen need to show more resiliency and embrace change and innovation as key business strategies to survive.
No to Protectionism, Pursuing Multilateralism
PCCI remains supportive of efforts to push for the conclusion of the WTO Doha Development Round. Given the prevailing global economic realities, the private sector believes that the conclusion of the Doha Round has become a necessity that would help reinvigorate many distressed economies.
Studies show that global trade will decline by 9% this year, the biggest contraction since the World War Two. Both the developed and developing countries will be negatively affected, with exports from developed countries falling by 10% and 2-3% for developing countries.
As such, the PCCI strongly believes that a more open trading system, which is the main agenda of the Doha Round, is one of the best avenues to help address the ongoing global economic crisis. PCCI considers the principles of openness, transparency, non-discrimination, and fairness espoused by the Doha Round to be important drivers in stimulating the growth of a battered global economy.
The PCCI strongly opposes any calls for protectionism and isolationism. The experience of increasing tariff rates and reverting to other protectionist measures during the Great Depression showed that these kinds of policies only lead to the further depression of economies and thus, to global economic slump.
The Philippine business community believes that any form of protectionist measures will not, in anyway, help in the recovery of the global economy, but instead hamper global economic growth. While some countries have signified their intention to protect their domestic industries and sectors from the crisis, history has shown that this will only lead to retaliatory measures from others, which would only further undermine global trade.
Stimulating Local Economies, rebuilding confidence
Local economic development appears to be the vital engine for economic activity stimulation – given the strong potential for job creation leading to consumption activities. In order to address the global economic challenge, PCCI, on its part, proposed and government accepted to create a P100 billion (US$ 2 billion) stimulus package for infrastructure spending. The fund will be contributed 50/ 50 by GFIs and the private sector and the upside is, spending from this fund will not impact on the budget deficit. The mechanics and other details with respect to use, accountability and transparency, structure, sovereign guarantees, monitoring and control are now being worked out by PCCI with DOF, DBP, SSS, Landbank, GSIS, NEDA, and NDC.
In addition, the business sector would need to work together with government economic planners in putting our house in order and make our economy more resilient and globally competitive so that as the world turns for the better, we are ready to seize the opportunities.
On the tourism front, with the number of foreign visitors expected to decline this year, we would need to re-prioritize by promoting domestic tourism. We could encourage Filipinos to explore the Philippines instead of going abroad. We need to spend our travel money in the Philippines and give business to local entrepreneurs involved in the travel industry, i.e., food, transportation, souvenirs, handicrafts. We need to do our share in keeping local tourist places viable. It is possible that not too many foreign visitors will come around in the next two years, maybe even longer.
Another important immediate matter is rejuvenating people’s confidence in the banking system. The most immediate and critical intervention is to secure our banking sector by increasing maximum deposit insurance to 1 million pesos as depositor confidence is the point of maximum leverage in this context of uncertainty and competitive moves of our neighbors in this regard.
Improving Export Performance
We also need to find ways to improve our export performance. This would be addressed by finding other markets for our export products. We need to find other markets for Philippine products in order to boost exports. As of now, 8 of the top 10 economies which the Philippines exports to will be in recession while China and Malaysia will experience significant slowdown. The weaker the economies of our trading partners, the weaker the demand for Philippine goods.
Weaker exports affect not only the peso and the country’s ability to finance its imports and service its foreign debt. More worrisome is slowing exports’ impact on jobs. In turn, a slower export means more factory closures and layoffs. Pushed to its logical conclusion, this means worsening poverty and rising incidence of hunger.
PCCI Igniting the F.I.R.E.
In order to provide a roadmap for the business sector, PCCI has identified and will focus in the next 2 years on 4 key basic areas: namely: Food Security, Infrastructure, Re-engineered Education, and Energy (or F.I.R.E.).
First, we need to focus on investing on agricultural development and reform because agriculture employs a third of our country’s workforce.
Second, Infrastructure is a key factor that directly affects the country’s global competitiveness. An efficient transport network will reshape the country’s physical and economic configuration.
Third, to address our unemployment problem, we need to re-engineer our educational system in order to address the mismatch between skills of our graduates and the requirement of the industry.
It goes without saying that business leaders need to help address the issue of unemployment. The important focus now should be on job creation and job preservation. In order to preserve jobs and help establishments and companies survive, several adjustment measures may also need to be implemented like flexible work arrangements, compressed work week, forced leave, reduce work hours/ days, reduced number of shifts and job rotation.
The strong potentials of the business process outsourcing industry for job generation have given our country something to hold to keep our heads above water. We would need to diversify and focus on high value BPO services like animation, IT services, medical and legal transcription, engineering design, and software development, among others.
Fourth, on Energy, PCCI advocates a predictable energy policy to level the playing field. PCCI has drawn a roadmap to influence policy makers to achieve supply/ demand balance using the right and appropriate mix for our country’s power generation sector. This is aimed at promoting energy self- sufficiency at competitive cost.
Regional Cooperation against the Crisis
Strengthening regional domestic demand and increased intra-regional trading are key to the growth and productivity of the region, amid the global economic slowdown.
Trade and investment agreements and regional market integration have lowered the risks of investing abroad thereby fuelling outward investments. With fiscal and economic reforms in place, Asia-Pacific countries now have large foreign reserves which, according to studies by the UN-ESCAP, are invested outside the region.
Benefiting from growth in their home markets, the corporate sector has been increasingly investing in neighboring developing economies and in developed economies as strategy to secure access to global supply chain, markets, brands, scale economies, technologies, human capital. Leading the pack are Japan, Hong Kong, Singapore, South Korea, and Taiwan.
The financial turmoil is also offering prime investment opportunities for sovereign wealth from the region.
State-owned firms such as Singapore’s Temasek Holdings pumped in USD$6.2 billion into Merrill Lynch's coffers. Other firms buying equity investments in financial institutions in the United States and Europe include the Government of Singapore Investment Corporation in Citigroup and UBS, the China Investment Corporation in Morgan Stanley and Temasek Holdings in Barclays.
Due to the region’s relatively strong growth projections, the subprime crisis has potentially increased interest in Asia-Pacific’s assets. While not immune to the volatility in the global market, the ability of the region to be insulated from the subprime crisis would depend on the policy responses Asian economies would initiate to address the new challenges
ASEAN Regional Integration for Competitiveness
ASEAN’s response to the challenge of competitiveness has been regional integration to create scale economies through such measures as the ASEAN Industrial Cooperation Scheme (AICO), the Comprehensive Preferential Tariff of the ASEAN Free Trade Area (AFTA- CEPT), and the Framework Agreement on Trade in Services (AFAS), the Investment Area Agreement (AIA), and the priority integration project. These measures have facilitated joint ventures and branching out within the region as companies endeavor to secure access to a competitive supply chain, markets, scale economies, technologies and human capital.
Enhancing ASEAN’s Competitiveness
Key factors at play in ASEAN’s competitiveness are continuing government support, government- private sector dialogue, regional policy framework for corporate governance and competition, policy support to SMEs and infrastructure development.
Governments must continue to play a facilitating role in enabling regional champions, local players and ASEAN SMEs to compete and thrive in the global economy.
To further maintain its competitive edge amidst the global economic slowdown, ASEAN must leverage on key fundamental issues such as corporate governance, and competition.
Considering their sizable contribution to the ASEAN economies, strong support should be given to SMEs in terms of access to technology, finance and information, and upgrade of industrial and management skills.
On the announcement that ASEAN plans to have an infrastructure finance mechanism, there is also a need to urge policymakers to seriously consider immediately putting up regional mechanism to bolster infrastructure development.
Sailing the Rough Seas: Economic Resiliency Plan
In the face of the global meltdown, the government intends to stay afloat and avoid negative growth through a stimulus package called the “Economic Resiliency Plan (ERP)”. The ERP will minimize the impact of the global economic downturn through measures aimed at stimulating positive performance in all sectors of society.
The ERP is being put in place as two-thirds of the world are in recession due to the global economic crunch. The Philippines has managed to sustain its growth because of past and ongoing reforms to ensure soundness of its macroeconomic fundamentals.
Government is aware that it is critical that government agencies “hit the ground running” and that fiscal and monetary policy adjustment be enforced alongside implementation of pump-priming programs and vital projects and activities (PPAs).
The ERP entails ensuring resources through better revenue collection; enhancement of cash liquidity, access to credit and low interest rates; and more effective spending. It seeks to ensure stable growth, save and create jobs, provide assistance to the most vulnerable sectors, ensure low and stable prices, and improve competitiveness in preparation for the global economic rebound.
Fiscal Stimulus
Simply put, the government intends to battle the present crisis by increasing spending. To do so, it proposes a PhP330 billion stimulus package broken down as follows:
First, PhP160 billion is the increase in the 2009 budget over that of 2008. Secretary Ralph Recto of NEDA said the fund would be used to hire needed personnel such as teachers, policemen, soldiers and doctors. He added that this is an opportune time to step up repair and rehabilitation of government buildings and fast-track purchases of supplies and equipment such as patrol cars and ambulances.
This fund would also strengthen government agriculture support though the FIELDS program. Initiated last year, FIELDS includes: (a) the provision of cheaper fertilizer and micronutrients; (b) rehabilitation and restoration of irrigation facilities; (c) extension, education and training; (d) loans for inputs, shallow tube wells, and surface water pumps; (e) the provision of dryers and other post harvest facilities; and (f) subsidy for seeds and adoption of quality genetic materials.
Government emphasized that agencies responsible for infrastructure development should implement and scale up quick-disbursing high impact projects. These projects, which are labor intensive and have high local value added, include accessibility facilities for the disabled; the construction, repair, or rehabilitation of irrigation systems; and the construction of local roads and asphalt overlay, among others. He said agencies should work with LGUs in implementing such projects and make sure that project implementation is closely monitored.
Furthermore, this fund would expand social protection. Government would (a) realign resources to increase social welfare programs like conditional cash transfers; (b) ensure full national government contribution to the National Health Insurance Program (support program for the indigent); (c) increase scholarship/training allocation; and (d) augment funds for upgrading primary and secondary hospitals. In addition, government would also match grants to LGUs and make more educational loans available.
The expansion in social protection would not only provide essential services but also create jobs with the hiring of teachers, doctors, and nurses, among others.
For this portion of the ERP to be fully effective, Secretary Recto emphasized that 60 percent of the budget should be spent by the first semester of 2009 and resources should be shifted from slow to fast-moving projects. He added that, in implementing these PPAs, government should take advantage of the “window of opportunity” as presented by the declining inflation and interest rates and good weather conditions in the first hallf of the year.
Second, income tax adjustments during the year would circulate around PhP40 billion in the market. The scheduled reduction of corporate income taxes from 35 to 30 percent would allow firms to spend about PhP20 billion more in investments while the increase in tax exemption in personal income tax empowers individuals with an estimated PhP20 billion.
Third, the government will ask the Government Service Insurance System (GSIS), the Social Security System (SSS), and the government owned and controlled corporations (GOCCs) to use their investible funds and work with the private sector to invest in needed infrastructure. Recto said this PhP100 billion package would not only generate jobs, increase money in the market but also prepare the country for “the good times ahead.”
Fourth, the government also looks at pumping around PhP30 billion by improving the fund disbursement of SSS, GSIS and PhilHealth. Secretary Recto said he sees a very big gap between individuals’ mandatory contributions and their claims and benefits. For example, he said PhilHealth has annual contributions roughly amounting to PhP24-25 billion while yearly claims and benefits only total about PhP15 billion. He said this may not only expand peoples’ access to health services but also provide business to private hospitals. In this light, he concludes that PhilHealth, GSIS and SSS can contribute PhP10 billion each for additional benefits to its members.
Other Measures
The government, business and labor sector are now working to implement coping mechanisms to prevent job and business closures. At present, some businesses and industries have already implemented (a) shortened work shifts and work weeks; (b) maximized vacation leaves; and (c) adopted rotating forced leaves, among others.
NEDA said that OFWs abroad and those returning would be assisted through enhanced reintegration services and livelihood assistance. There would be a “payback package” for OFWs which include the setting up of a PhP250 million support fund, skills training to avail of in-demand jobs in other parts of the world, and setting up of Department of Labor and Employment (DOLE) and Overseas Workers Welfare Administrations (OWWA) desks in the provinces to match OFWs’ skills with available jobs.
Also, government would expand trade, investment and tourism and accelerate lending to small and medium enterprises (SMEs).On the other hand, exporting firms are encouraged to diversify, innovate and technologically upgrade their products.
PCCI believes that government and the private sector, including, local chambers, business organizations, business councils and all stakeholders must work together in perfect unity to endure and overcome the global economic turmoil.
With the advent of the crisis, business leaders and government managers are scrambling to develop and craft economic strategies and roadmaps responsive enough to save our ailing industries and generate more jobs for society’s most vulnerable sectors.
The two near- term challenges faced by the Philippines now are safeguarding the achievement of recent years (including stronger growth momentum and progress in fiscal management) and protecting society’s most exposed groups during the slowdown. The second means helping those who have lost, and are in danger of losing, their jobs due to company closures and retrenchments.
Needless to say, difficult times require innovative solutions and strategies which business must develop in these trying times. It is important for businesses to think proactively. Every businessman who wants to survive needs more than strategies for competitiveness. Business needs to create realizable, long-term plans to ensure our sustainability and survival. Faced with uncertainties, several businesses have to shape up and attain unparalleled efficiency to keep them above water. Businessmen need to show more resiliency and embrace change and innovation as key business strategies to survive.
No to Protectionism, Pursuing Multilateralism
PCCI remains supportive of efforts to push for the conclusion of the WTO Doha Development Round. Given the prevailing global economic realities, the private sector believes that the conclusion of the Doha Round has become a necessity that would help reinvigorate many distressed economies.
Studies show that global trade will decline by 9% this year, the biggest contraction since the World War Two. Both the developed and developing countries will be negatively affected, with exports from developed countries falling by 10% and 2-3% for developing countries.
As such, the PCCI strongly believes that a more open trading system, which is the main agenda of the Doha Round, is one of the best avenues to help address the ongoing global economic crisis. PCCI considers the principles of openness, transparency, non-discrimination, and fairness espoused by the Doha Round to be important drivers in stimulating the growth of a battered global economy.
The PCCI strongly opposes any calls for protectionism and isolationism. The experience of increasing tariff rates and reverting to other protectionist measures during the Great Depression showed that these kinds of policies only lead to the further depression of economies and thus, to global economic slump.
The Philippine business community believes that any form of protectionist measures will not, in anyway, help in the recovery of the global economy, but instead hamper global economic growth. While some countries have signified their intention to protect their domestic industries and sectors from the crisis, history has shown that this will only lead to retaliatory measures from others, which would only further undermine global trade.
Stimulating Local Economies, rebuilding confidence
Local economic development appears to be the vital engine for economic activity stimulation – given the strong potential for job creation leading to consumption activities. In order to address the global economic challenge, PCCI, on its part, proposed and government accepted to create a P100 billion (US$ 2 billion) stimulus package for infrastructure spending. The fund will be contributed 50/ 50 by GFIs and the private sector and the upside is, spending from this fund will not impact on the budget deficit. The mechanics and other details with respect to use, accountability and transparency, structure, sovereign guarantees, monitoring and control are now being worked out by PCCI with DOF, DBP, SSS, Landbank, GSIS, NEDA, and NDC.
In addition, the business sector would need to work together with government economic planners in putting our house in order and make our economy more resilient and globally competitive so that as the world turns for the better, we are ready to seize the opportunities.
On the tourism front, with the number of foreign visitors expected to decline this year, we would need to re-prioritize by promoting domestic tourism. We could encourage Filipinos to explore the Philippines instead of going abroad. We need to spend our travel money in the Philippines and give business to local entrepreneurs involved in the travel industry, i.e., food, transportation, souvenirs, handicrafts. We need to do our share in keeping local tourist places viable. It is possible that not too many foreign visitors will come around in the next two years, maybe even longer.
Another important immediate matter is rejuvenating people’s confidence in the banking system. The most immediate and critical intervention is to secure our banking sector by increasing maximum deposit insurance to 1 million pesos as depositor confidence is the point of maximum leverage in this context of uncertainty and competitive moves of our neighbors in this regard.
Improving Export Performance
We also need to find ways to improve our export performance. This would be addressed by finding other markets for our export products. We need to find other markets for Philippine products in order to boost exports. As of now, 8 of the top 10 economies which the Philippines exports to will be in recession while China and Malaysia will experience significant slowdown. The weaker the economies of our trading partners, the weaker the demand for Philippine goods.
Weaker exports affect not only the peso and the country’s ability to finance its imports and service its foreign debt. More worrisome is slowing exports’ impact on jobs. In turn, a slower export means more factory closures and layoffs. Pushed to its logical conclusion, this means worsening poverty and rising incidence of hunger.
PCCI Igniting the F.I.R.E.
In order to provide a roadmap for the business sector, PCCI has identified and will focus in the next 2 years on 4 key basic areas: namely: Food Security, Infrastructure, Re-engineered Education, and Energy (or F.I.R.E.).
First, we need to focus on investing on agricultural development and reform because agriculture employs a third of our country’s workforce.
Second, Infrastructure is a key factor that directly affects the country’s global competitiveness. An efficient transport network will reshape the country’s physical and economic configuration.
Third, to address our unemployment problem, we need to re-engineer our educational system in order to address the mismatch between skills of our graduates and the requirement of the industry.
It goes without saying that business leaders need to help address the issue of unemployment. The important focus now should be on job creation and job preservation. In order to preserve jobs and help establishments and companies survive, several adjustment measures may also need to be implemented like flexible work arrangements, compressed work week, forced leave, reduce work hours/ days, reduced number of shifts and job rotation.
The strong potentials of the business process outsourcing industry for job generation have given our country something to hold to keep our heads above water. We would need to diversify and focus on high value BPO services like animation, IT services, medical and legal transcription, engineering design, and software development, among others.
Fourth, on Energy, PCCI advocates a predictable energy policy to level the playing field. PCCI has drawn a roadmap to influence policy makers to achieve supply/ demand balance using the right and appropriate mix for our country’s power generation sector. This is aimed at promoting energy self- sufficiency at competitive cost.
Regional Cooperation against the Crisis
Strengthening regional domestic demand and increased intra-regional trading are key to the growth and productivity of the region, amid the global economic slowdown.
Trade and investment agreements and regional market integration have lowered the risks of investing abroad thereby fuelling outward investments. With fiscal and economic reforms in place, Asia-Pacific countries now have large foreign reserves which, according to studies by the UN-ESCAP, are invested outside the region.
Benefiting from growth in their home markets, the corporate sector has been increasingly investing in neighboring developing economies and in developed economies as strategy to secure access to global supply chain, markets, brands, scale economies, technologies, human capital. Leading the pack are Japan, Hong Kong, Singapore, South Korea, and Taiwan.
The financial turmoil is also offering prime investment opportunities for sovereign wealth from the region.
State-owned firms such as Singapore’s Temasek Holdings pumped in USD$6.2 billion into Merrill Lynch's coffers. Other firms buying equity investments in financial institutions in the United States and Europe include the Government of Singapore Investment Corporation in Citigroup and UBS, the China Investment Corporation in Morgan Stanley and Temasek Holdings in Barclays.
Due to the region’s relatively strong growth projections, the subprime crisis has potentially increased interest in Asia-Pacific’s assets. While not immune to the volatility in the global market, the ability of the region to be insulated from the subprime crisis would depend on the policy responses Asian economies would initiate to address the new challenges
ASEAN Regional Integration for Competitiveness
ASEAN’s response to the challenge of competitiveness has been regional integration to create scale economies through such measures as the ASEAN Industrial Cooperation Scheme (AICO), the Comprehensive Preferential Tariff of the ASEAN Free Trade Area (AFTA- CEPT), and the Framework Agreement on Trade in Services (AFAS), the Investment Area Agreement (AIA), and the priority integration project. These measures have facilitated joint ventures and branching out within the region as companies endeavor to secure access to a competitive supply chain, markets, scale economies, technologies and human capital.
Enhancing ASEAN’s Competitiveness
Key factors at play in ASEAN’s competitiveness are continuing government support, government- private sector dialogue, regional policy framework for corporate governance and competition, policy support to SMEs and infrastructure development.
Governments must continue to play a facilitating role in enabling regional champions, local players and ASEAN SMEs to compete and thrive in the global economy.
To further maintain its competitive edge amidst the global economic slowdown, ASEAN must leverage on key fundamental issues such as corporate governance, and competition.
Considering their sizable contribution to the ASEAN economies, strong support should be given to SMEs in terms of access to technology, finance and information, and upgrade of industrial and management skills.
On the announcement that ASEAN plans to have an infrastructure finance mechanism, there is also a need to urge policymakers to seriously consider immediately putting up regional mechanism to bolster infrastructure development.
Sailing the Rough Seas: Economic Resiliency Plan
In the face of the global meltdown, the government intends to stay afloat and avoid negative growth through a stimulus package called the “Economic Resiliency Plan (ERP)”. The ERP will minimize the impact of the global economic downturn through measures aimed at stimulating positive performance in all sectors of society.
The ERP is being put in place as two-thirds of the world are in recession due to the global economic crunch. The Philippines has managed to sustain its growth because of past and ongoing reforms to ensure soundness of its macroeconomic fundamentals.
Government is aware that it is critical that government agencies “hit the ground running” and that fiscal and monetary policy adjustment be enforced alongside implementation of pump-priming programs and vital projects and activities (PPAs).
The ERP entails ensuring resources through better revenue collection; enhancement of cash liquidity, access to credit and low interest rates; and more effective spending. It seeks to ensure stable growth, save and create jobs, provide assistance to the most vulnerable sectors, ensure low and stable prices, and improve competitiveness in preparation for the global economic rebound.
Fiscal Stimulus
Simply put, the government intends to battle the present crisis by increasing spending. To do so, it proposes a PhP330 billion stimulus package broken down as follows:
First, PhP160 billion is the increase in the 2009 budget over that of 2008. Secretary Ralph Recto of NEDA said the fund would be used to hire needed personnel such as teachers, policemen, soldiers and doctors. He added that this is an opportune time to step up repair and rehabilitation of government buildings and fast-track purchases of supplies and equipment such as patrol cars and ambulances.
This fund would also strengthen government agriculture support though the FIELDS program. Initiated last year, FIELDS includes: (a) the provision of cheaper fertilizer and micronutrients; (b) rehabilitation and restoration of irrigation facilities; (c) extension, education and training; (d) loans for inputs, shallow tube wells, and surface water pumps; (e) the provision of dryers and other post harvest facilities; and (f) subsidy for seeds and adoption of quality genetic materials.
Government emphasized that agencies responsible for infrastructure development should implement and scale up quick-disbursing high impact projects. These projects, which are labor intensive and have high local value added, include accessibility facilities for the disabled; the construction, repair, or rehabilitation of irrigation systems; and the construction of local roads and asphalt overlay, among others. He said agencies should work with LGUs in implementing such projects and make sure that project implementation is closely monitored.
Furthermore, this fund would expand social protection. Government would (a) realign resources to increase social welfare programs like conditional cash transfers; (b) ensure full national government contribution to the National Health Insurance Program (support program for the indigent); (c) increase scholarship/training allocation; and (d) augment funds for upgrading primary and secondary hospitals. In addition, government would also match grants to LGUs and make more educational loans available.
The expansion in social protection would not only provide essential services but also create jobs with the hiring of teachers, doctors, and nurses, among others.
For this portion of the ERP to be fully effective, Secretary Recto emphasized that 60 percent of the budget should be spent by the first semester of 2009 and resources should be shifted from slow to fast-moving projects. He added that, in implementing these PPAs, government should take advantage of the “window of opportunity” as presented by the declining inflation and interest rates and good weather conditions in the first hallf of the year.
Second, income tax adjustments during the year would circulate around PhP40 billion in the market. The scheduled reduction of corporate income taxes from 35 to 30 percent would allow firms to spend about PhP20 billion more in investments while the increase in tax exemption in personal income tax empowers individuals with an estimated PhP20 billion.
Third, the government will ask the Government Service Insurance System (GSIS), the Social Security System (SSS), and the government owned and controlled corporations (GOCCs) to use their investible funds and work with the private sector to invest in needed infrastructure. Recto said this PhP100 billion package would not only generate jobs, increase money in the market but also prepare the country for “the good times ahead.”
Fourth, the government also looks at pumping around PhP30 billion by improving the fund disbursement of SSS, GSIS and PhilHealth. Secretary Recto said he sees a very big gap between individuals’ mandatory contributions and their claims and benefits. For example, he said PhilHealth has annual contributions roughly amounting to PhP24-25 billion while yearly claims and benefits only total about PhP15 billion. He said this may not only expand peoples’ access to health services but also provide business to private hospitals. In this light, he concludes that PhilHealth, GSIS and SSS can contribute PhP10 billion each for additional benefits to its members.
Other Measures
The government, business and labor sector are now working to implement coping mechanisms to prevent job and business closures. At present, some businesses and industries have already implemented (a) shortened work shifts and work weeks; (b) maximized vacation leaves; and (c) adopted rotating forced leaves, among others.
NEDA said that OFWs abroad and those returning would be assisted through enhanced reintegration services and livelihood assistance. There would be a “payback package” for OFWs which include the setting up of a PhP250 million support fund, skills training to avail of in-demand jobs in other parts of the world, and setting up of Department of Labor and Employment (DOLE) and Overseas Workers Welfare Administrations (OWWA) desks in the provinces to match OFWs’ skills with available jobs.
Also, government would expand trade, investment and tourism and accelerate lending to small and medium enterprises (SMEs).On the other hand, exporting firms are encouraged to diversify, innovate and technologically upgrade their products.
PCCI believes that government and the private sector, including, local chambers, business organizations, business councils and all stakeholders must work together in perfect unity to endure and overcome the global economic turmoil.
Friday, March 6, 2009
Great Speeches: Sample Talking Points
From the Author: The format of talking points need not follow the rigid format of an actual speech. Usually, talking points just need to have bullet points that will highlight the most important matters to be discussed. Just like the sample below.
OUTLOOK ON THE PHILIPPINE ECONOMY
2ND HALF – 2005
GENERAL OUTLOOK
BUSINESS IN GENERAL IS HOPEFUL THAT THE ECONOMY WILL REMAIN IN GOOD SHAPE THE IN LATER PART OF 2005 AMIDST THE PRESSURES WE ARE CONFRONTED WITH AT THE MOMENT.
BOTTLENECKS
CONTINUOUS INCREASE IN THE PRICES OF PETROLEUM – AFFECTS BUSINESS OPERATIONS AND INCREASES PRODUCTION COST; AFFECTING THE GENERAL PUBLIC GIVING RISE TO OTHER ISSUES ON TRANSPORT COST, WAGE AND PRICES OF COMMODITIES LEADING INCREASE IN INFLATION
BUDGET DEFICIT – REMAINS TO BE A SERIOUS GOVERNMENT PROBLEM – CAN ONLY BE ADDRESSED IF THE NEEDED LEGISLATION ON INCREASE GOVERNMENT REVENUES SUCH AS VAT IS PASSED AND IMPLEMENTED PROPERLY
GOVERNANCE ISSUES SUCH AS CORRUPTION AND INSURGENCY AFFECTING INVESTOR CONFIDENCE AND FOREIGN CAPITAL INFLOW TO THE COUNTRY
ECONOMY IN THE 1ST HALF OF 2005
BUSINESS’ VIEW ON THE ECONOMY IN THE 1ST QUARTER OF THE YEAR IS SOMEWHAT MIXED.
o THE CREDIT DOWNGRADING, INCREASING PRICES OF BASIC COMMODITIES AND PUBLIC PERCEPTION ON GOVERNANCE REFORMS HAVE CONTRIBUTED TO THE WEAKNESS OF THE ECONOMY ON THE 1ST QUARTER OF 2005;
o ON THE OTHERHAND, THE RECOVERY OF THE PESO, CONSISTENT POSITIVE PERFORMANCE OF THE STOCK MARKET, STABLE INTEREST RATES AND THE REMITTANCE INFLOW FROM OUR OFWs CONTRIBUTE TO THE POSITIVE PERFORMANCE OF THE ECONOMY.
WHAT BUSINESS HOPES TO SEE IN THE 2ND HALF OF 2005
PASSAGE OF KEY LEGISLATION AND ECONOMIC REFORM MEASURES THAT WILL CONTRIBUTE GREATLY TO IMPROVING THE COUNTRY’S ECONOMIC CONDITION, THESE INCLUDE:
o THE VAT BILL – 2% INCREASE IS MORE OF A BETTER OPTION THEN TACKLE THE EXEMPTIONS AS THEY IMPACT ON CONSUMER INTEREST
o ANTI-SMUGGLING BILL THAT WILL PUT TO A STOP TO SMUGGLING ACTIVITIES THAT SEVERELY HURT THE LOCAL ECONOMY AND AFFECT GOVERNMENT REVENUES OF OVER P50 BILLION EVERY YEAR
o POSSIBILITY OF REVIVING THE OPSF TO PROTECT CONSUMER INTEREST IN THE CONTINUOUS INCREASE IN THE OIL PRICES. PCCI IS SERIOUSLY TACKLING AND THIS MATTER AND PREPARING ITS POSITION TO BE SUBMITTED TO THE ENERGY DEPARTMENT
o GOVERNMENT SHOULD INCREASE ALLOCATION OF FUNDS FOR SME DEVELOPMENT – WE NEED TO DEVELOP ENTREPRENEURS ESPECIALLY IN THE COUNTRYSIDE
ISSUES THAT NEED WIDE SECTORAL CONSULTATIONS
o WAGE INCREASE – BOTH EMPLOYEES AND EMPLOYERS ARE AFFECTED BY THE PRESSURES OF LOCAL AND GLOBAL ECONOMY – INCREASING THE WAGE SHOULD TRANSLATET TO AN INCREASE WORKERS’ PRODUCTIVITY AND THE BUSINESS OUTPUT– IT SHOULD GO HAND IN HAND – THEN WE CAN BE MORE COMPETITIVE AND PROVIDE MORE TO PROVIDE FOR WORKERS’ DEMANDS. WE ARE ALSO HOPING THAT WE CAN BROADEN THE TAX EXEMPTION BASE OF THE WORKERS AS INCENTIVE
o TRANSPORT INCREASES – SHOULD BE DECIDED ON THE INTEREST OF THE COMMUTING PUBLIC – TAKING ALSO INTO CONSIDERATION THE INCENTIVES THAT GOVERNMENT CAN OFFER TO LESSEN THE IMPACT OF A TRANSPORT FARE INCREASE AND THE PRICES OF OIL.
o INTERNATIONAL AGREEMENTS – THIS IS NOT GIVEN ENOUGH ATTENTION BUT THIS IS VERY IMPORTANT. RIGHT NOW, OUR COUNTRY IS PROCEEDING TOWARDS LOWERING OF TARIFFS PER OUR COMMITMENT TO ASEAN-AFTA AND WTO.
o THUS, PUBLIC INTEREST IS AT STAKE SINCE WE ARE NOW LIBERALIZING OUR INDUSTRIES. WE HAVE UPCOMING TRADE AGREEMENTS WITH JAPAN AND US WHICH WILL HOPEFULLY BENEFIT US BY ATLEAST $20 BILLION OF EXPORTS.
o BUT WE NEED TO BE VERY CAREFUL IN TACKLING THESE TRADE AGREEMENTS, WE SHOULD TAKE INTO CONSIDERATION HOW THESE AGREEMENTS CAN IMPROVE THE CONDITION OF THE RURAL AREAS AND ADDRESSING POVERTY.
OUTLOOK ON THE PHILIPPINE ECONOMY
2ND HALF – 2005
GENERAL OUTLOOK
BUSINESS IN GENERAL IS HOPEFUL THAT THE ECONOMY WILL REMAIN IN GOOD SHAPE THE IN LATER PART OF 2005 AMIDST THE PRESSURES WE ARE CONFRONTED WITH AT THE MOMENT.
BOTTLENECKS
CONTINUOUS INCREASE IN THE PRICES OF PETROLEUM – AFFECTS BUSINESS OPERATIONS AND INCREASES PRODUCTION COST; AFFECTING THE GENERAL PUBLIC GIVING RISE TO OTHER ISSUES ON TRANSPORT COST, WAGE AND PRICES OF COMMODITIES LEADING INCREASE IN INFLATION
BUDGET DEFICIT – REMAINS TO BE A SERIOUS GOVERNMENT PROBLEM – CAN ONLY BE ADDRESSED IF THE NEEDED LEGISLATION ON INCREASE GOVERNMENT REVENUES SUCH AS VAT IS PASSED AND IMPLEMENTED PROPERLY
GOVERNANCE ISSUES SUCH AS CORRUPTION AND INSURGENCY AFFECTING INVESTOR CONFIDENCE AND FOREIGN CAPITAL INFLOW TO THE COUNTRY
ECONOMY IN THE 1ST HALF OF 2005
BUSINESS’ VIEW ON THE ECONOMY IN THE 1ST QUARTER OF THE YEAR IS SOMEWHAT MIXED.
o THE CREDIT DOWNGRADING, INCREASING PRICES OF BASIC COMMODITIES AND PUBLIC PERCEPTION ON GOVERNANCE REFORMS HAVE CONTRIBUTED TO THE WEAKNESS OF THE ECONOMY ON THE 1ST QUARTER OF 2005;
o ON THE OTHERHAND, THE RECOVERY OF THE PESO, CONSISTENT POSITIVE PERFORMANCE OF THE STOCK MARKET, STABLE INTEREST RATES AND THE REMITTANCE INFLOW FROM OUR OFWs CONTRIBUTE TO THE POSITIVE PERFORMANCE OF THE ECONOMY.
WHAT BUSINESS HOPES TO SEE IN THE 2ND HALF OF 2005
PASSAGE OF KEY LEGISLATION AND ECONOMIC REFORM MEASURES THAT WILL CONTRIBUTE GREATLY TO IMPROVING THE COUNTRY’S ECONOMIC CONDITION, THESE INCLUDE:
o THE VAT BILL – 2% INCREASE IS MORE OF A BETTER OPTION THEN TACKLE THE EXEMPTIONS AS THEY IMPACT ON CONSUMER INTEREST
o ANTI-SMUGGLING BILL THAT WILL PUT TO A STOP TO SMUGGLING ACTIVITIES THAT SEVERELY HURT THE LOCAL ECONOMY AND AFFECT GOVERNMENT REVENUES OF OVER P50 BILLION EVERY YEAR
o POSSIBILITY OF REVIVING THE OPSF TO PROTECT CONSUMER INTEREST IN THE CONTINUOUS INCREASE IN THE OIL PRICES. PCCI IS SERIOUSLY TACKLING AND THIS MATTER AND PREPARING ITS POSITION TO BE SUBMITTED TO THE ENERGY DEPARTMENT
o GOVERNMENT SHOULD INCREASE ALLOCATION OF FUNDS FOR SME DEVELOPMENT – WE NEED TO DEVELOP ENTREPRENEURS ESPECIALLY IN THE COUNTRYSIDE
ISSUES THAT NEED WIDE SECTORAL CONSULTATIONS
o WAGE INCREASE – BOTH EMPLOYEES AND EMPLOYERS ARE AFFECTED BY THE PRESSURES OF LOCAL AND GLOBAL ECONOMY – INCREASING THE WAGE SHOULD TRANSLATET TO AN INCREASE WORKERS’ PRODUCTIVITY AND THE BUSINESS OUTPUT– IT SHOULD GO HAND IN HAND – THEN WE CAN BE MORE COMPETITIVE AND PROVIDE MORE TO PROVIDE FOR WORKERS’ DEMANDS. WE ARE ALSO HOPING THAT WE CAN BROADEN THE TAX EXEMPTION BASE OF THE WORKERS AS INCENTIVE
o TRANSPORT INCREASES – SHOULD BE DECIDED ON THE INTEREST OF THE COMMUTING PUBLIC – TAKING ALSO INTO CONSIDERATION THE INCENTIVES THAT GOVERNMENT CAN OFFER TO LESSEN THE IMPACT OF A TRANSPORT FARE INCREASE AND THE PRICES OF OIL.
o INTERNATIONAL AGREEMENTS – THIS IS NOT GIVEN ENOUGH ATTENTION BUT THIS IS VERY IMPORTANT. RIGHT NOW, OUR COUNTRY IS PROCEEDING TOWARDS LOWERING OF TARIFFS PER OUR COMMITMENT TO ASEAN-AFTA AND WTO.
o THUS, PUBLIC INTEREST IS AT STAKE SINCE WE ARE NOW LIBERALIZING OUR INDUSTRIES. WE HAVE UPCOMING TRADE AGREEMENTS WITH JAPAN AND US WHICH WILL HOPEFULLY BENEFIT US BY ATLEAST $20 BILLION OF EXPORTS.
o BUT WE NEED TO BE VERY CAREFUL IN TACKLING THESE TRADE AGREEMENTS, WE SHOULD TAKE INTO CONSIDERATION HOW THESE AGREEMENTS CAN IMPROVE THE CONDITION OF THE RURAL AREAS AND ADDRESSING POVERTY.
Great Speeches: Sample Closing Remarks
HON. QUINGLIN, MINISTER OF AGRICULTURE, PEOPLE’S REPUBLIC OF CHINA;
HON. DOMINGO PANGANIBAN, SECRETARY, DEPARTMENT OF AGRICULTURE;
MEMBERS OF THE DIPLOMATIC CORPS;
COLLEAGUES IN THE BUSINESS COMMUNITY;
GOOD MORNING.
IT IS TRULY A PRIVILEGE TO HAVE WITH US MINISTER DU QINGLIN AND SECRETARY DOMINGO PANGANIBAN IN OUR MIDST THIS MORNING.
HEARING AND LEARNING FROM CHINA’S AGRICULTURE MINISTER ON THEIR AGRICULTURAL POLICY EDUCATED ME, AND ALL OF US HERE, ON HOW WE COULD IMPROVE OUR OWN AGRICULTURAL SECTOR. WE ALL KNOW THAT IF THE PHILIPPINES WANTS TO BE COMPETITIVE, WE MUST FIRST HAVE A STRONG AGRICULTURAL BASE. FOOD SECURITY IS A GIVEN IN ANY STABLE ECONOMY, AS WE HAVE SEEN IN OTHER COUNTRIES WHO ARE WELL DEVELOPED.
IN THE PHILIPPINES, WE CONSIDER FARMERS AS ‘BAYANIS’ OR NATIONAL HEROES, BECAUSE FILIPINO FARMERS LITERALLY PROVIDE FOOD IN THE TABLE OF EVERY CITIZEN. I BELIEVE THAT THIS ALSO HOLDS TRUE FOR THE CHINESE GOVERNMENT.
THUS, LET US CONTINUE TO DO WHAT OUR GOVERNMENTS AIM TO DO AND WORK TOGETHER TO IMPROVE THE AGRICULTURE SECTOR BY PROVIDING THEM WITH ALL THE ADMINISTRATIVE AND FINANCIAL HELP THEY CAN GET.
THE PHILIPPINE GOVERNMENT HAS GOOD PLANS FOR IMPROVING THE AGRICULTURE SECTOR. THE PRIVATE SECTOR SUPPORTS THE AGENCY’S VARIOUS PROGRAMS. THUS, EXISTING POLICIES SHOULD BE IMPLEMENTED AND FURTHER ENHANCED.
I WOULD LIKE TO THANK ALL OF YOU WHO ARE PRESENT HERE IN THIS BREAKFAST MEETING, IT HAS BEEN A FRUITFUL GATHERING. OUR EXCHANGES HAVE BEEN BENEFICIAL FOR ALL OF US, BE IT IN THE GOVERNMENT OR IN THE PRIVATE SECTOR.
A PLEASANT DAY TO ALL.
HON. DOMINGO PANGANIBAN, SECRETARY, DEPARTMENT OF AGRICULTURE;
MEMBERS OF THE DIPLOMATIC CORPS;
COLLEAGUES IN THE BUSINESS COMMUNITY;
GOOD MORNING.
IT IS TRULY A PRIVILEGE TO HAVE WITH US MINISTER DU QINGLIN AND SECRETARY DOMINGO PANGANIBAN IN OUR MIDST THIS MORNING.
HEARING AND LEARNING FROM CHINA’S AGRICULTURE MINISTER ON THEIR AGRICULTURAL POLICY EDUCATED ME, AND ALL OF US HERE, ON HOW WE COULD IMPROVE OUR OWN AGRICULTURAL SECTOR. WE ALL KNOW THAT IF THE PHILIPPINES WANTS TO BE COMPETITIVE, WE MUST FIRST HAVE A STRONG AGRICULTURAL BASE. FOOD SECURITY IS A GIVEN IN ANY STABLE ECONOMY, AS WE HAVE SEEN IN OTHER COUNTRIES WHO ARE WELL DEVELOPED.
IN THE PHILIPPINES, WE CONSIDER FARMERS AS ‘BAYANIS’ OR NATIONAL HEROES, BECAUSE FILIPINO FARMERS LITERALLY PROVIDE FOOD IN THE TABLE OF EVERY CITIZEN. I BELIEVE THAT THIS ALSO HOLDS TRUE FOR THE CHINESE GOVERNMENT.
THUS, LET US CONTINUE TO DO WHAT OUR GOVERNMENTS AIM TO DO AND WORK TOGETHER TO IMPROVE THE AGRICULTURE SECTOR BY PROVIDING THEM WITH ALL THE ADMINISTRATIVE AND FINANCIAL HELP THEY CAN GET.
THE PHILIPPINE GOVERNMENT HAS GOOD PLANS FOR IMPROVING THE AGRICULTURE SECTOR. THE PRIVATE SECTOR SUPPORTS THE AGENCY’S VARIOUS PROGRAMS. THUS, EXISTING POLICIES SHOULD BE IMPLEMENTED AND FURTHER ENHANCED.
I WOULD LIKE TO THANK ALL OF YOU WHO ARE PRESENT HERE IN THIS BREAKFAST MEETING, IT HAS BEEN A FRUITFUL GATHERING. OUR EXCHANGES HAVE BEEN BENEFICIAL FOR ALL OF US, BE IT IN THE GOVERNMENT OR IN THE PRIVATE SECTOR.
A PLEASANT DAY TO ALL.
Great Speeches: Reaction to Keynote Speaker's Speech
(Pleasantries)
Thank you very much for inviting us to be part of this forum.
PCCI stands committed to pioneer sustainable initiatives through our various local chambers to ensure that the problems of population management and poverty incidence will be addressed especially in the rural areas of the country.
It is true that business plays a vital role in contributing to the upliftment of the quality of life of individuals especially the low-middle income families and SME workers. Over the years, we have seen the plight of people who are in the midst of poverty and growing number of needs for their families. As a result of this, a number of social problems arises – criminality, street children, child labor, among others, are just some of the social constraints that we are confronted with in the various communities where businesses operate.
In this view, corporate social responsibility has emerged as a function of business. But CSR doesn’t stop in providing temporary relief in the lives of the less fortunate but providing a sustainable means for these individuals and families to develop their full potentials as actors in economic development.
I agree on PRISM’s goal of increasing productivity of workers vis-à-vis population management. By doing so, as I mentioned earlier, we are able to develop the full potentials of individuals to contribute to the economic growth and development of the country.
Coming from this perspective, we at PCCI as the largest business organization in the country and the recognized voice of Philippine business has come up strong with our platform of advocacy on population management.
Population management makes perfect business sense. It is in this context that our population management advocacy is premised at. PCCI’s population management advocacy and activities are anchored on the general understanding of the development challenges of the high population growth rate in the country as it impacts the sustainability of business.
Our thrust is to act as a conduit in bringing forward the necessary information to help individuals and couples come up with an informed decision and exercise their freedom of choice in managing their families.
Moreso, to effectively articulate our vision into doable programs we are adopting a three-pronged approach to effectively engage our local chambers in implementing specific projects that will cater to the needs of their SMEs and their workers. These approaches consist of advocacy, partnership with NGOs and establishment of service clinics.
These I do believe go hand in hand with the ideals expressed by Cris in articulating PRISM’s vision of seeing business-led interventions on population management.
But our appreciation of population management as to the role of business doesn’t end here. Having a vital function in administering population management activities, we look at the bigger picture that defines our emerging role in this intensive program of advocacy.
This is the reason why as part of our workprogram, we will also be looking at emerging issues on reproductive health such as HIV/AIDS prevalence in the workplace, the alarming high infant and maternal mortality rates, and the underdeveloped healthcare infrastructure in the country. All these call for enhanced interventions that only the private sector can provide supplementing all other programs of government.
We welcome PRISM’s entry to the population management advocacy and service delivery spectrum. Your ideals concretely link the planned interventions we in PCCI have in mind.
It is in this regard that I wish to inform you that we are ready and committed to work hand in hand in ensuring that the efforts we have started years back will not stall and continue to flourish especially in communities where private sector support is most needed.
Once again, thank you very much for this opportunity and good morning to all.
Thank you very much for inviting us to be part of this forum.
PCCI stands committed to pioneer sustainable initiatives through our various local chambers to ensure that the problems of population management and poverty incidence will be addressed especially in the rural areas of the country.
It is true that business plays a vital role in contributing to the upliftment of the quality of life of individuals especially the low-middle income families and SME workers. Over the years, we have seen the plight of people who are in the midst of poverty and growing number of needs for their families. As a result of this, a number of social problems arises – criminality, street children, child labor, among others, are just some of the social constraints that we are confronted with in the various communities where businesses operate.
In this view, corporate social responsibility has emerged as a function of business. But CSR doesn’t stop in providing temporary relief in the lives of the less fortunate but providing a sustainable means for these individuals and families to develop their full potentials as actors in economic development.
I agree on PRISM’s goal of increasing productivity of workers vis-à-vis population management. By doing so, as I mentioned earlier, we are able to develop the full potentials of individuals to contribute to the economic growth and development of the country.
Coming from this perspective, we at PCCI as the largest business organization in the country and the recognized voice of Philippine business has come up strong with our platform of advocacy on population management.
Population management makes perfect business sense. It is in this context that our population management advocacy is premised at. PCCI’s population management advocacy and activities are anchored on the general understanding of the development challenges of the high population growth rate in the country as it impacts the sustainability of business.
Our thrust is to act as a conduit in bringing forward the necessary information to help individuals and couples come up with an informed decision and exercise their freedom of choice in managing their families.
Moreso, to effectively articulate our vision into doable programs we are adopting a three-pronged approach to effectively engage our local chambers in implementing specific projects that will cater to the needs of their SMEs and their workers. These approaches consist of advocacy, partnership with NGOs and establishment of service clinics.
These I do believe go hand in hand with the ideals expressed by Cris in articulating PRISM’s vision of seeing business-led interventions on population management.
But our appreciation of population management as to the role of business doesn’t end here. Having a vital function in administering population management activities, we look at the bigger picture that defines our emerging role in this intensive program of advocacy.
This is the reason why as part of our workprogram, we will also be looking at emerging issues on reproductive health such as HIV/AIDS prevalence in the workplace, the alarming high infant and maternal mortality rates, and the underdeveloped healthcare infrastructure in the country. All these call for enhanced interventions that only the private sector can provide supplementing all other programs of government.
We welcome PRISM’s entry to the population management advocacy and service delivery spectrum. Your ideals concretely link the planned interventions we in PCCI have in mind.
It is in this regard that I wish to inform you that we are ready and committed to work hand in hand in ensuring that the efforts we have started years back will not stall and continue to flourish especially in communities where private sector support is most needed.
Once again, thank you very much for this opportunity and good morning to all.
Great Speeches: Induction and General Membership Meeting Speech
On behalf of the Philippine Chamber of Commerce and Industry (PCCI), I am honored to be the guest speaker and inducting officer for this year’s induction of officers and board of directors of the Distribution Management Association of the Philippines (DMAP).
The DMAP has always embodied its mission to develop the distribution profession, to participate in the development of government policies and to directly improve each corporate member’s quality of service.
I have always been supportive in DMAP’s cause on lowering the cost of the distribution of goods as well as its contributions to the country’s logistics and distributions systems. For years now, we in the Philippine Chamber of Commerce and Industry have been carrying the torch and rallying on behalf of the business sector through your support in advocating for this cause.
I believe that distribution will always play a viable intermediary role in our country.
The real value of distributors lies on their function as informational intermediaries. A few years ago, a man named Adam Fein of Pembroke Consulting gave a very good interview about strategic planning and distribution management. He stated that many distributors are adopting a new strategic posture that many companies are recognizing that they can “profitably perform many functions that do not necessarily fall into the traditional purview of a distributor.” These functions comprise of activities that focus on delivering value to customers and suppliers. Knowledge about how and when their customers are using their products is significant because we have begun to respect data.
The PCCI has always aimed to help the government and bring about substantial developments in logistics management. One most notable results of PCCI’s intervention in this regard was the Road Roll-On/Roll-Off Terminal System (RRTS), reducing complexity, total distribution and auxiliary costs affecting the costs of goods and doing business in the country.
Highways and ports have been more and more systematized in order to achieve a reliable transport system which in turn, provides better distribution of goods. Furthermore, we at the PCCI have been participating with the government in policy formation, continuing to fulfill the role of being principal advocates of a globally competitive logistics and distribution management.
While efforts are being done and outcomes are being reaped as I speak, I still implore for everyone’s assistance to ensure the success and effectiveness of distribution management process. It is of utter significance that we achieve a solid, multi-sectoral participation and cooperation in coming up with the realization of measures and policies.
The cost of sea transport has been rising in the last decade especially in the last five years. Sea freight increases and cargo handling rate increases contribute to this. Cargo handling rates have been increasing until President Gloria Macapagal-Arroyo suspended it in 2002.
The complexity of the current global environment challenges us to more competitive and collaborative to respond the needs and requirements of our stakeholders.
A of change cultural mindset needs to be carried out if we are to eliminate the obstacles that impede our competitiveness potentials. Leadership along with vigilance should exist on the floor. To link vigilance and operational reality, performance measures should be set to hone in on the right activities and help set common goals towards a better performance.
With the aid of your competent leaders, I look forward to your association’s continuing efforts to provide dependable education, innovation, and service to your members. Rest assured that you can count on PCCI’s support in our mutual commitment and goal of attaining sustainable growth and development for our nation.
On our part, we remain committed as a sounding board in economic and governmental affairs that affect the stake of the entire business community and the consuming public. On this note, under my leadership, PCCI will continue to remain active in participating in the preparation of a roadmap to institute key reforms that will allow our country to position itself better among the community of nations.
DMAP deserves much credit for serving as an observer and a doer of justice. By trying to eliminate collusion and corruption within the distribution profession, the Distribution Management of the Philippines continues to be one of the champions of the Filipino people. I look forward to all of us doing our part towards building a stronger logistics and distribution industry by helping each other combat issues and problems hindering our businesses from being fully productive and globally competitive.
Congratulations President Jun Gabrino and the 2005 DMAP Board of Directors and Officers!
The DMAP has always embodied its mission to develop the distribution profession, to participate in the development of government policies and to directly improve each corporate member’s quality of service.
I have always been supportive in DMAP’s cause on lowering the cost of the distribution of goods as well as its contributions to the country’s logistics and distributions systems. For years now, we in the Philippine Chamber of Commerce and Industry have been carrying the torch and rallying on behalf of the business sector through your support in advocating for this cause.
I believe that distribution will always play a viable intermediary role in our country.
The real value of distributors lies on their function as informational intermediaries. A few years ago, a man named Adam Fein of Pembroke Consulting gave a very good interview about strategic planning and distribution management. He stated that many distributors are adopting a new strategic posture that many companies are recognizing that they can “profitably perform many functions that do not necessarily fall into the traditional purview of a distributor.” These functions comprise of activities that focus on delivering value to customers and suppliers. Knowledge about how and when their customers are using their products is significant because we have begun to respect data.
The PCCI has always aimed to help the government and bring about substantial developments in logistics management. One most notable results of PCCI’s intervention in this regard was the Road Roll-On/Roll-Off Terminal System (RRTS), reducing complexity, total distribution and auxiliary costs affecting the costs of goods and doing business in the country.
Highways and ports have been more and more systematized in order to achieve a reliable transport system which in turn, provides better distribution of goods. Furthermore, we at the PCCI have been participating with the government in policy formation, continuing to fulfill the role of being principal advocates of a globally competitive logistics and distribution management.
While efforts are being done and outcomes are being reaped as I speak, I still implore for everyone’s assistance to ensure the success and effectiveness of distribution management process. It is of utter significance that we achieve a solid, multi-sectoral participation and cooperation in coming up with the realization of measures and policies.
The cost of sea transport has been rising in the last decade especially in the last five years. Sea freight increases and cargo handling rate increases contribute to this. Cargo handling rates have been increasing until President Gloria Macapagal-Arroyo suspended it in 2002.
The complexity of the current global environment challenges us to more competitive and collaborative to respond the needs and requirements of our stakeholders.
A of change cultural mindset needs to be carried out if we are to eliminate the obstacles that impede our competitiveness potentials. Leadership along with vigilance should exist on the floor. To link vigilance and operational reality, performance measures should be set to hone in on the right activities and help set common goals towards a better performance.
With the aid of your competent leaders, I look forward to your association’s continuing efforts to provide dependable education, innovation, and service to your members. Rest assured that you can count on PCCI’s support in our mutual commitment and goal of attaining sustainable growth and development for our nation.
On our part, we remain committed as a sounding board in economic and governmental affairs that affect the stake of the entire business community and the consuming public. On this note, under my leadership, PCCI will continue to remain active in participating in the preparation of a roadmap to institute key reforms that will allow our country to position itself better among the community of nations.
DMAP deserves much credit for serving as an observer and a doer of justice. By trying to eliminate collusion and corruption within the distribution profession, the Distribution Management of the Philippines continues to be one of the champions of the Filipino people. I look forward to all of us doing our part towards building a stronger logistics and distribution industry by helping each other combat issues and problems hindering our businesses from being fully productive and globally competitive.
Congratulations President Jun Gabrino and the 2005 DMAP Board of Directors and Officers!
Great Speeches: 2005 -General Economic Outlook of the Country and Abroad
Fellow chamber members, good afternoon.
At the outset, allow me to get straight to the core of my presentation – the general economic outlook of the country and abroad.
There is no truth to Persistent rumors that the Philippine economy is at the brink of collapse. The rumors are grossly exaggerated.
The numbers as of the first half of the year say that it continues to grow. The government’s growth forecast for the whole of this year has been adjusted to a range between four and five percent. It is a notch slower than the January forecast ranging from five to six point something percent.
Assuming a low-end growth of just four percent is reached, that will be very far from the brink. A collapse means a recession or shrinking of the economy. We are speaking of a moderate growth of at least four percent despite all the noise in the political arena.
Having said this, allow me to get into the details of my presentation. First is the impact of investments and exports. Let’s start with investments. The Board of Investment (BOI) the other week released through the newspapers the mid-year report on investments and concluded it was a big improvement from last year.
Investments
As expected, foreign direct investments dripped in, in trickles. They have been out of the picture for some time now. The growth was pumped in by local entrepreneurs. BOI’s facts confirm my observation in my visits to chambers from Tuguegarao to Tawi-Tawi that our local businessmen don’t get scared easily by political infighting.
The good news is, local businessmen continue to bet on the future of the economy. They have not chickened out. The lesson must have already sunk in. We, the Filipino businessmen, if we put our collective minds into it, will bring progress and prosperity to our country.
Japanese, American, Chinese and European money may help later. But when the chips are down, we are on our own. When things look rosy again, that’s when foreigners put in their stakes.
Exports
Philippine export in the past decade was the economy’s saving grace. Double-digit growth from 1992 to the year 2000 pushed the export sector from contributing one fifth of the Gross Domestic Product in 1991 to one half of GDP at the turn of the century. In dollar terms, export revenues grew from $9 billion to $38 billion or more than four-fold in 10 years.
A global trade slump in 2001 resulted in export decline of over 15% that year. We fully recovered and posted real growth of $1.5 billion from 2001 figures on sales of $39.5 billion last year.
For the first five months of this year, most of our exports still posted moderate growth but the erratic performance of electronics and semiconductor products due to softer demand in the global market, moderated over-all growth. We have not pared down our target of hitting a 10 percent growth by December.
All things considered, however, especially the continued rise of oil prices in the world market to historic levels, we may miss our target by a few percent.
We are still to push exports to double-digit growth sustained in the 1990s. Its performance had given us a glimpse on what can be achieved if we can coax the entire economy into performing like the rest of East Asia.
Political Economy
Now, let me touch on our weakest link, the relationship between the government and the private sector as both affect economic growth. In our country, it is extremely hard to draw a straight line between the political rulers and the economic elite. At least in Metro Manila and maybe Cebu, the borderlines are clear. But in most provinces, the political rulers and economic elite are one and the same.
The concentration of wealth and political power in the hands of a few hundred families may have been the biggest obstacle to the redistribution of opportunities to improve life in the Philippine countryside.
The situation is not, however, hopeless. The families of Overseas Filipino Workers, better known as OFWs, are slowly changing the economic landscape in rural Philippines. Some are turning into a new breed of entrepreneurs. Some are buying lands from the old, unproductive landed gentry. Others are modernizing Philippine agriculture by bringing in tractors, threshers and other motorized farm implements. In some towns, OFWs are getting elected in municipal government.
The Bangko Sentral ng Pilipinas has estimated that OFW remittances may hit $12 billion this year. That is more or less P688 billion directly reaching Filipino families this year. Imagine what that kind of money can do if invested wisely.
Global Competitiveness
If we accept the country’s global competitiveness ratings as gospel truth, it is indeed going downhill. But if you find time looking for centers of excellence, you may note that Jollibee is not alone. A new breed of Filipino entrepreneurs like the Hortaleza couple of Splash or the Zesto Juice drink of Alfredo Yao, are proving to be world-class.
Again, don’t forget the OFWs who are coming home. They have proven themselves equal to any other race in their fields of expertise anywhere in the world. Given an even chance to excel in the domestic front, they will again prove equal to the challenge.
This brings me to my latest advocacy. I firmly believe that local governments and the local chambers are capable of creating a favorable climate for business and investment in their home turfs. They can hammer out investment packages and sell those packages to investors elsewhere in the country and abroad. The strategy will disperse industries, jobs and wealth across the archipelago.
If you may recall, former Cebu Governor Lito Osmena did just that for Cebu, selling the province as a tourist and investment haven in the Pacific when the rest of the economy was sinking during the last years of President Marcos. The farther the region or the province is from Manila, the higher is the opportunity of local governments to create a healthy business environment.
Of course, a determined national government can make a difference. It can build modern ports like what the Vietnamese government is doing now. It can cut down red tape in the processing of business related papers. It can run after smugglers, tax evaders and their patrons in government. It can reduce the cost of doing business. It can change policies in keeping with the changing times. It can reform itself into efficient support service machinery. The opportunities are limitless.
Opportunities Abound
In the agriculture and lifestyle sectors, there are still huge opportunities for creative entrepreneurs. I have said many times, that the Philippines is one big greenhouse. However, why is it, that the Philippines still imports sugar, rice, pork, beef, and today, even vegetables and spices -- our most basic food needs?
If you go around Southeast Asia, you will notice immediately, that our cost of living, is higher than most. Indonesians and Thais can have a full meal for P20.00, while our workers cannot. A self-respecting nation, to keep its economic independence, must produce its own food in sufficient quantity. That is the only way, that we can ensure that other nations will not use food supply, as a blackmail weapon against us in times of crisis. The rich nations like Japan, European Union, and the US, knows this only too well. This is obvious in the WTO negotiation, where food subsidies, have become the most critical issue, and where the developed economies, refused to give up the subsidies that they give to their farming sector, even if the rest of the world demands that the practice be stopped. You will recall, that during the Cancun ministerial meeting 3 years ago, the WTO discussions collapsed, because of this issue. It appears, that in the forthcoming Hongkong Senior Ministerial meeting of the WTO, the same will happen again. For the developed countries, food self-sufficiency, is equal to national security.
In the case of the Philippines, the food sector, has been shrinking in the last two and a half decades. Today, it only contributes 15% of the total value of goods and services, or our GDP. And yet, it is in the food sector where 40 million of our people depend on for livelihood. As a result, half of our 83 million people are poor, for they produce so little, and even earn less.
To my mind, the key, is to make farming profitable to the tillers of our soil. Fishing and fish culture must be made a decent source of income for our fishermen. The exploitation of our forest resources, must bring progress to our forest dwellers.
That is not what is happening today, because in our economy, it is the traders that make the large profits, out of the sweat of our farmers and fisher folks, who remain dirt poor. And, who are the traders that I am referring to? If you go around the country, they are the Chinese-Filipino businessmen. This explains why sometimes, they resent us.
It is therefore our duty, as a business leaders and entrepreneurs, to change this impression, and more importantly, to change this distorted trading system. We need not go directly into farming and agriculture, we must however, try to go into the processing of produce coming from the farmers. Your region, a vast agro-industrial area as strategic as Cebu, offers the solution to some of our agriculture mishaps.
Tourism and Investments
Let me also talk about tourism. It is often said, that the Philippines, can become a world-class tourist destination, with white-sand beaches and lush rainforests, and potential mountain resorts and spas, not to mention our very hospitable natives.
Visayas never runs out of these landscapes that offer every tourist, local and foreign alike, the sanctuary to relax and get out from the bustling world of the metropolis. Cebu, recognized by our government as a major tourism hub offers tremendous opportunities for tourism and economic activities to prosper and these be cascaded down to other areas in the region, Guimaras, Ilolilo, Bacolod, Samar and Antique, to name a few.
In making these ideas become parallel to our vision of creating an attractive tourism destination, the other component where there is a great demand for private sector intervention is in the area of tourism investments. And this we have to champion. Until some of us begin to take a more serious look, and gamble at these exotic places, this would be another opportunity lost to us and our nation.
Sunrise Industries
To end with a ray of hope, let us see if we have been developing sunrise industries. The air is full of where and how we have gone bad, most of us don’t bother to look for our redeeming sides, anymore.
Are there silver linings behind the dark clouds? In Metro Manila and other urban centers, the in-thing today are call centers and other business process outsourcing operations or BPOs. Call centers have filled up most of the vacant floors of buildings in Makati and the Ortigas business centers. These are spilling out to Alabang, Quezon City and Subic.
These services companies are cornering the best new graduates by offering starting salary rates much higher than the established corporations. The latest estimate is that, call centers have put up about 60,000 seats, employing close to 100,000 young men and women as of the end of June this year.
BPOs and other information technology enabled services have been slower at growing but a wide variety of services from legal research to medical transcription to accountancy services are sprouting. Official, however, has been slow.
Outside of these high-technology driven industries, I foresee a steady growth of enterprises and new industries that find themselves integrated in the Asia-wide production, supply and distribution chain. Our trade with the rest of Asia is expected to steadily rise as parts of the regional economy are drawn closer to each other.
This has happened in the electronics and automotive industries. As we rediscover our areas of complementation, other industries will find where and how they can get into one bigger chain. I suspect that integration will make a big difference when Asian governments realize the need to put together a regional food supply chain. Host to almost half of the people on earth, Asia has the demand push and fast acquiring the purchasing power to stage a new green revolution.
Keeping the momentum alive
We, in the chamber movement over the years have become the critical catalyst for economic development. In most instances, we have shown and led the way for economic survival and cooperation. In this time of great ordeal that our nation is beset with, we again stand firm as an institution to serve our small constituents with important and key services needed to survive the test of time.
As we do our part, we also need to make those in government realize that they must also clean their acts. That is why we continue to advocate for red tape and corruption in the processing of business papers be decisively checked.
At the national level, we are concentrating on processes at customs, BIR, the DENR and the housing arms of government. If they can make it easier, faster and cheaper to get import and export papers processed, that would go a long way in helping boost our international and domestic trade.
After my appointment as Special Presidential Envoy for Trade Negotiations, PCCI is now active in putting together the private sectors negotiating positions in on-going Free Trade talks with Japan and China, and preparing for forthcoming talks with the United States.
We need to get our acts together in this. We need your inputs. This is the reason that a week after this convention, we are again holding a consultative forum on trade negotiations, where will asking all of you give substance in defining our national position in all trade agreements we are negotiating.
At your level, I strongly suggest that you help us draw what constitute national interest in the economic arena.
As I also suggested to other field chambers, I also encourage you to continue representations with your local government executives in checking red tape in their respective territories. The City of Mandaue is a classic example of a business friendly LGU. Business friendly local governments, by just reducing red-tape to a minimum in the processing of business permits, building permits, clearances and the like, can be of great help in encouraging economic activities at the barangay level.
These things look small. Taken together, they constitute the over-all business climate at the ground level.
We have empowered the five regional PCCI vice presidents including Metro Manila to draw their own plans, programs and projects including their advocacies, when I took office early this year. We have helped fund some those projects like the Business with The Poor pilot projects funded by Senator Kiko Pangilinan.
We sought for help from international development agencies for other programs that qualify for international anti-poverty support. The rest, they implement with resources they generate themselves.
Complementing all these initiatives, in the next few months we will start engaging ourselves in a real MSME development agenda that will provide the base for MSME loan guarantees and minimize the risk of lending to our sector. Through an MSME development center that PCCI will be pioneering, we will be able to service our member MSMEs, and improve the access of these enterprises to various lending facilities both from government and private lending institutions. And in this area, I will need your chamber’s support so we can champion together real and accessible funds for MSME development.
While those in government are still talking about federalization, we, in PCCI, have done it. We believe that the men in the front are in the best position to know and act on the issues, problems and challenges in their own communities.
In capsule, what I have been putting across is this. At this point in our economic development, it is no longer good business sense to wait for the climate to improve. We must take a direct hand in shaping it.
Some courses of action may look too little or too simple. Others may look great. At times, those in government are a burden. In others, they may be valuable partners. But if we are to build an economically healthy nation, a nation that can give decent jobs to all job seeks, we have to do our part.
Ladies and gentlemen, the political climate may look hazy. But the economic climate in our country is not that bad.
We just keep our cool. Do what we do best which is doing business and making investment decisions. Like all storms, man-made or nature born, this too will blow over.
Thank you and good day.
At the outset, allow me to get straight to the core of my presentation – the general economic outlook of the country and abroad.
There is no truth to Persistent rumors that the Philippine economy is at the brink of collapse. The rumors are grossly exaggerated.
The numbers as of the first half of the year say that it continues to grow. The government’s growth forecast for the whole of this year has been adjusted to a range between four and five percent. It is a notch slower than the January forecast ranging from five to six point something percent.
Assuming a low-end growth of just four percent is reached, that will be very far from the brink. A collapse means a recession or shrinking of the economy. We are speaking of a moderate growth of at least four percent despite all the noise in the political arena.
Having said this, allow me to get into the details of my presentation. First is the impact of investments and exports. Let’s start with investments. The Board of Investment (BOI) the other week released through the newspapers the mid-year report on investments and concluded it was a big improvement from last year.
Investments
As expected, foreign direct investments dripped in, in trickles. They have been out of the picture for some time now. The growth was pumped in by local entrepreneurs. BOI’s facts confirm my observation in my visits to chambers from Tuguegarao to Tawi-Tawi that our local businessmen don’t get scared easily by political infighting.
The good news is, local businessmen continue to bet on the future of the economy. They have not chickened out. The lesson must have already sunk in. We, the Filipino businessmen, if we put our collective minds into it, will bring progress and prosperity to our country.
Japanese, American, Chinese and European money may help later. But when the chips are down, we are on our own. When things look rosy again, that’s when foreigners put in their stakes.
Exports
Philippine export in the past decade was the economy’s saving grace. Double-digit growth from 1992 to the year 2000 pushed the export sector from contributing one fifth of the Gross Domestic Product in 1991 to one half of GDP at the turn of the century. In dollar terms, export revenues grew from $9 billion to $38 billion or more than four-fold in 10 years.
A global trade slump in 2001 resulted in export decline of over 15% that year. We fully recovered and posted real growth of $1.5 billion from 2001 figures on sales of $39.5 billion last year.
For the first five months of this year, most of our exports still posted moderate growth but the erratic performance of electronics and semiconductor products due to softer demand in the global market, moderated over-all growth. We have not pared down our target of hitting a 10 percent growth by December.
All things considered, however, especially the continued rise of oil prices in the world market to historic levels, we may miss our target by a few percent.
We are still to push exports to double-digit growth sustained in the 1990s. Its performance had given us a glimpse on what can be achieved if we can coax the entire economy into performing like the rest of East Asia.
Political Economy
Now, let me touch on our weakest link, the relationship between the government and the private sector as both affect economic growth. In our country, it is extremely hard to draw a straight line between the political rulers and the economic elite. At least in Metro Manila and maybe Cebu, the borderlines are clear. But in most provinces, the political rulers and economic elite are one and the same.
The concentration of wealth and political power in the hands of a few hundred families may have been the biggest obstacle to the redistribution of opportunities to improve life in the Philippine countryside.
The situation is not, however, hopeless. The families of Overseas Filipino Workers, better known as OFWs, are slowly changing the economic landscape in rural Philippines. Some are turning into a new breed of entrepreneurs. Some are buying lands from the old, unproductive landed gentry. Others are modernizing Philippine agriculture by bringing in tractors, threshers and other motorized farm implements. In some towns, OFWs are getting elected in municipal government.
The Bangko Sentral ng Pilipinas has estimated that OFW remittances may hit $12 billion this year. That is more or less P688 billion directly reaching Filipino families this year. Imagine what that kind of money can do if invested wisely.
Global Competitiveness
If we accept the country’s global competitiveness ratings as gospel truth, it is indeed going downhill. But if you find time looking for centers of excellence, you may note that Jollibee is not alone. A new breed of Filipino entrepreneurs like the Hortaleza couple of Splash or the Zesto Juice drink of Alfredo Yao, are proving to be world-class.
Again, don’t forget the OFWs who are coming home. They have proven themselves equal to any other race in their fields of expertise anywhere in the world. Given an even chance to excel in the domestic front, they will again prove equal to the challenge.
This brings me to my latest advocacy. I firmly believe that local governments and the local chambers are capable of creating a favorable climate for business and investment in their home turfs. They can hammer out investment packages and sell those packages to investors elsewhere in the country and abroad. The strategy will disperse industries, jobs and wealth across the archipelago.
If you may recall, former Cebu Governor Lito Osmena did just that for Cebu, selling the province as a tourist and investment haven in the Pacific when the rest of the economy was sinking during the last years of President Marcos. The farther the region or the province is from Manila, the higher is the opportunity of local governments to create a healthy business environment.
Of course, a determined national government can make a difference. It can build modern ports like what the Vietnamese government is doing now. It can cut down red tape in the processing of business related papers. It can run after smugglers, tax evaders and their patrons in government. It can reduce the cost of doing business. It can change policies in keeping with the changing times. It can reform itself into efficient support service machinery. The opportunities are limitless.
Opportunities Abound
In the agriculture and lifestyle sectors, there are still huge opportunities for creative entrepreneurs. I have said many times, that the Philippines is one big greenhouse. However, why is it, that the Philippines still imports sugar, rice, pork, beef, and today, even vegetables and spices -- our most basic food needs?
If you go around Southeast Asia, you will notice immediately, that our cost of living, is higher than most. Indonesians and Thais can have a full meal for P20.00, while our workers cannot. A self-respecting nation, to keep its economic independence, must produce its own food in sufficient quantity. That is the only way, that we can ensure that other nations will not use food supply, as a blackmail weapon against us in times of crisis. The rich nations like Japan, European Union, and the US, knows this only too well. This is obvious in the WTO negotiation, where food subsidies, have become the most critical issue, and where the developed economies, refused to give up the subsidies that they give to their farming sector, even if the rest of the world demands that the practice be stopped. You will recall, that during the Cancun ministerial meeting 3 years ago, the WTO discussions collapsed, because of this issue. It appears, that in the forthcoming Hongkong Senior Ministerial meeting of the WTO, the same will happen again. For the developed countries, food self-sufficiency, is equal to national security.
In the case of the Philippines, the food sector, has been shrinking in the last two and a half decades. Today, it only contributes 15% of the total value of goods and services, or our GDP. And yet, it is in the food sector where 40 million of our people depend on for livelihood. As a result, half of our 83 million people are poor, for they produce so little, and even earn less.
To my mind, the key, is to make farming profitable to the tillers of our soil. Fishing and fish culture must be made a decent source of income for our fishermen. The exploitation of our forest resources, must bring progress to our forest dwellers.
That is not what is happening today, because in our economy, it is the traders that make the large profits, out of the sweat of our farmers and fisher folks, who remain dirt poor. And, who are the traders that I am referring to? If you go around the country, they are the Chinese-Filipino businessmen. This explains why sometimes, they resent us.
It is therefore our duty, as a business leaders and entrepreneurs, to change this impression, and more importantly, to change this distorted trading system. We need not go directly into farming and agriculture, we must however, try to go into the processing of produce coming from the farmers. Your region, a vast agro-industrial area as strategic as Cebu, offers the solution to some of our agriculture mishaps.
Tourism and Investments
Let me also talk about tourism. It is often said, that the Philippines, can become a world-class tourist destination, with white-sand beaches and lush rainforests, and potential mountain resorts and spas, not to mention our very hospitable natives.
Visayas never runs out of these landscapes that offer every tourist, local and foreign alike, the sanctuary to relax and get out from the bustling world of the metropolis. Cebu, recognized by our government as a major tourism hub offers tremendous opportunities for tourism and economic activities to prosper and these be cascaded down to other areas in the region, Guimaras, Ilolilo, Bacolod, Samar and Antique, to name a few.
In making these ideas become parallel to our vision of creating an attractive tourism destination, the other component where there is a great demand for private sector intervention is in the area of tourism investments. And this we have to champion. Until some of us begin to take a more serious look, and gamble at these exotic places, this would be another opportunity lost to us and our nation.
Sunrise Industries
To end with a ray of hope, let us see if we have been developing sunrise industries. The air is full of where and how we have gone bad, most of us don’t bother to look for our redeeming sides, anymore.
Are there silver linings behind the dark clouds? In Metro Manila and other urban centers, the in-thing today are call centers and other business process outsourcing operations or BPOs. Call centers have filled up most of the vacant floors of buildings in Makati and the Ortigas business centers. These are spilling out to Alabang, Quezon City and Subic.
These services companies are cornering the best new graduates by offering starting salary rates much higher than the established corporations. The latest estimate is that, call centers have put up about 60,000 seats, employing close to 100,000 young men and women as of the end of June this year.
BPOs and other information technology enabled services have been slower at growing but a wide variety of services from legal research to medical transcription to accountancy services are sprouting. Official, however, has been slow.
Outside of these high-technology driven industries, I foresee a steady growth of enterprises and new industries that find themselves integrated in the Asia-wide production, supply and distribution chain. Our trade with the rest of Asia is expected to steadily rise as parts of the regional economy are drawn closer to each other.
This has happened in the electronics and automotive industries. As we rediscover our areas of complementation, other industries will find where and how they can get into one bigger chain. I suspect that integration will make a big difference when Asian governments realize the need to put together a regional food supply chain. Host to almost half of the people on earth, Asia has the demand push and fast acquiring the purchasing power to stage a new green revolution.
Keeping the momentum alive
We, in the chamber movement over the years have become the critical catalyst for economic development. In most instances, we have shown and led the way for economic survival and cooperation. In this time of great ordeal that our nation is beset with, we again stand firm as an institution to serve our small constituents with important and key services needed to survive the test of time.
As we do our part, we also need to make those in government realize that they must also clean their acts. That is why we continue to advocate for red tape and corruption in the processing of business papers be decisively checked.
At the national level, we are concentrating on processes at customs, BIR, the DENR and the housing arms of government. If they can make it easier, faster and cheaper to get import and export papers processed, that would go a long way in helping boost our international and domestic trade.
After my appointment as Special Presidential Envoy for Trade Negotiations, PCCI is now active in putting together the private sectors negotiating positions in on-going Free Trade talks with Japan and China, and preparing for forthcoming talks with the United States.
We need to get our acts together in this. We need your inputs. This is the reason that a week after this convention, we are again holding a consultative forum on trade negotiations, where will asking all of you give substance in defining our national position in all trade agreements we are negotiating.
At your level, I strongly suggest that you help us draw what constitute national interest in the economic arena.
As I also suggested to other field chambers, I also encourage you to continue representations with your local government executives in checking red tape in their respective territories. The City of Mandaue is a classic example of a business friendly LGU. Business friendly local governments, by just reducing red-tape to a minimum in the processing of business permits, building permits, clearances and the like, can be of great help in encouraging economic activities at the barangay level.
These things look small. Taken together, they constitute the over-all business climate at the ground level.
We have empowered the five regional PCCI vice presidents including Metro Manila to draw their own plans, programs and projects including their advocacies, when I took office early this year. We have helped fund some those projects like the Business with The Poor pilot projects funded by Senator Kiko Pangilinan.
We sought for help from international development agencies for other programs that qualify for international anti-poverty support. The rest, they implement with resources they generate themselves.
Complementing all these initiatives, in the next few months we will start engaging ourselves in a real MSME development agenda that will provide the base for MSME loan guarantees and minimize the risk of lending to our sector. Through an MSME development center that PCCI will be pioneering, we will be able to service our member MSMEs, and improve the access of these enterprises to various lending facilities both from government and private lending institutions. And in this area, I will need your chamber’s support so we can champion together real and accessible funds for MSME development.
While those in government are still talking about federalization, we, in PCCI, have done it. We believe that the men in the front are in the best position to know and act on the issues, problems and challenges in their own communities.
In capsule, what I have been putting across is this. At this point in our economic development, it is no longer good business sense to wait for the climate to improve. We must take a direct hand in shaping it.
Some courses of action may look too little or too simple. Others may look great. At times, those in government are a burden. In others, they may be valuable partners. But if we are to build an economically healthy nation, a nation that can give decent jobs to all job seeks, we have to do our part.
Ladies and gentlemen, the political climate may look hazy. But the economic climate in our country is not that bad.
We just keep our cool. Do what we do best which is doing business and making investment decisions. Like all storms, man-made or nature born, this too will blow over.
Thank you and good day.
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