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01/11/2012: Opening Remarks of Ambassador Cuisia, Paul H. Nitze School of Advanced International Studies, Johns Hopkins University, 01 November 2012

THE PHILIPPINES IN THE AQUINO GENERATION:
GOVERNANCE, GROWTH, AND SECURITY

THURSDAY, NOVEMBER 1, 2012

KENNEY AUDITORIUM
PAUL H. NITZE SCHOOL OF ADVANCED INTERNATIONAL STUDIES
JOHNS HOPKINS UNIVERSITY

OPENING REMARKS
OF H.E. JOSE L. CUISIA, JR.
Ambassador of the Philippines

Prof. Bill Wise,
Ambassador John Negroponte,
Ambassador John Meisto
Undersecretary Pio Batino,
Other distinguished guests,
Ladies and gentlemen,

I am most honored to welcome you today, to the first collaborative activity between the US Philippine Society, and the Johns Hopkins University School of Advanced International Studies.

The choice of the topics for our event today is most interesting: The Philippines in the Aquino Generation: Governance, Growth and Security. I find this most interesting, as this is actually the second generation of the Aquino presidency in my country. President Corazon C. Aquino, President Benigno Aquino’s mother, was President of the Philippines from 1986 to 1992.

I have the very distinct privilege of having served both President Aquinos, and what I would like to do to open this conference, is offer a few perspectives on the parallelisms between the two Aquino presidencies, and discuss how these have contributed to the Philippines’ growth and security.

Both President Noynoy Aquino and his mother were reluctant presidential candidates.  President Corazon Aquino came to office when Filipinos voted with their feet and trooped to EDSA to oust what was widely regarded as a corrupt dictatorship. Almost two decades later, the same desire for good governance translated into a landslide victory for her son President Benigno S Aquino III.

The parallelism could not be more significant: the Filipino people, tired of dishonest and corrupt government, voted for candidates with a reputation for integrity and strength of character over the traditional politicians.

I was privileged to serve  as senior official with Cabinet rank in the administration of President Corazon C. Aquino, first as Administrator/CEO of our Social Security System, and then as Governor of the Central Bank of the Philippines and Chairman of its Monetary Board. I thus witnessed first-hand the reforms introduced by President Cory Aquino. Remember that under Martial Law, our democratic institutions were severely undermined. President Aquino quickly moved to reestablish these structures with the drafting of a new Constitution; the conduct of free elections at the local and national levels; the installation of an independent judiciary; the restoration of the freedom of expression; and extending a hand in peace to communist rebels and secessionists. The most significant accomplishment, however, was the restoration of democracy.

Shortly after his election 18 years after, the current President Aquino is walking the same path. President Benigno Aquino captured the hearts and minds of the Filipino people with a simple slogan: “kung walang corrupt, walang mahirap.” Loosely translated, this means that poverty can be addressed by doing away with corruption. This firm belief in the value of good governance has underpinned the reforms he has since undertaken, as embodied in his Social Contract.

In both generations, good governance did translate to good economics. Despite the challenges posed by seven coup d'etat attempts and many natural disasters (e.g. earthquakes, typhoons and the Mount Pinatubo eruption, the Cory Aquino administration passed various critical laws such as a liberal Foreign Investment Act and the Comprehensive Agrarian Reform Law and initiated the privatization of government corporations that brought the economy back to its feet.

President Benigno Aquino, on his part, instituted the following:

  • Prudent fiscal controls coupled with intensified revenue collection efforts over the past year have laid the framework for efficient budgetary allocation in 2012;
  • Tax reform measures, including the proposed hike in  the Sin taxes  (alcohol and tobacco product taxes) and the rationalization of fiscal incentives aim to further improve the fiscal position;
  • Tighter prioritization of expenditures through the Zero Based Budgeting approach, improved composition of expenditures and quality of government services
  • Rigorous implementation of RATE, RATS, RIPS programs to go after evaders, smugglers, corrupt  officials, respectively, have improved tax collection
  • Contracts and public tenders are now posted on public websites to instill transparency in the procurement process;
  • Set-up BIR key performance indicators and publish actual results; establish appropriate performance standards and evaluations;
  • Enacted the GOCC Governance Act of 2011 which lays the groundwork for enhanced discipline and rationalized compensation structures in GOCCs; and
  • Set up the Debt Management Office at the Department of  Finance which is tasked to  formulate  and oversee the implementation of the Republic’s debt management strategy.

Allow me to present some data to demonstrate our current government’s commitment to transparency and accountability:

  • 121 tax evasion cases filed in two years with an estimated total tax liability of P42.788 billion (compared to 127 cases filed in 2005 to March 2010);
  • 50 cases filed in two years against corrupt collection officials and employees (compared to 74 cases filed from May 2003 to December 2009);
  • 99 percent of all local government units registered full compliance with the mandate to disclose all budget information and finances as well as bids, public offering and project statuses;
  • Participated in the Open Government Partnership initiated by the US and Brazil to ensure transparency and accountability and encourage greater citizen involvement.

Most significantly, charges of electoral fraud and plunder against the former President had been filed and a Chief Justice of the Supreme Court was impeached for his failure to disclose a substantial amount of assets.

The same single-minded pursuit of what is good for our people was reflected in reforms taken in the security sector.

Following the termination of the Military Bases Agreement towards the latter part of the administration of President Aquino, the Philippine Department of National Defense launched the Self-Reliance Defense Posture Program (SRDP). The government had pursued a good measure of self-reliance and started to provide the foundation for the growth of national defense-based industries. These efforts had generated savings of $20.36 million through export savings, import substitution, and local value added costs as well as job opportunities for heads of families benefiting 1,206 families.

It was also under President Cory Aquino’s administration that the government refocused its efforts on preventing illegal intrusions into Philippine territory and illegal exploitation of marine resources within the 200-mile exclusive economic zone. Efforts to make the military’s presence felt in the Kalayaan islands or the Spratly Islands were also intensified.

President Benigno S. Aquino has also taken a very strong stand in enhancing the Philippines’ external security. Consider the fact that since the Philippine modernization program began in 1995, the budget released for the 15 year program amounted to P32 billion. In the two years that President Aquino has been in office, he has already authorized the release of P28 billion or 85 percent of what was released in the previous 15 years. The government is also working for the passage of legislation that will allocate an additional P75 billion over the next five years to help us build a credible defense posture. President Noynoy’s efforts to safeguard our interests in the West Philippine Sea is also among our foreign policy priorities.

The Peace Process was something President Cory addressed earlier on in her administration. In January 1987 then President Corazon Aquino was on a short visit to Cotabato City and agreed to meet briefly with Al Haj Murad Ebrahim, military chief of the Moro Islamic Liberation Front (MILF.)

Twenty-five years later, her son welcomed Al Haj Murad to Malcanang to sign a Framework Agreement between the Philippine government and the MILF.  While this is just the beginning, the international community shares our optimism that that this Framework Agreement will lead to genuine and lasting peace in Mindanao. As the President said, we are now at the beginning of a comprehensive agreement that will map out the detailed steps, detailed commitments, and detailed programs that will lead to the fulfillment of our long-term goals.

Both sides agreed that the Framework Agreement addresses the most contentious issues in the peace talks, as everything in it will be subject not only to congressional approval but to public scrutiny and a referendum.

Clearly, we see the second generation Aquino President building on the principles of good governance first put into place by his mother, and we have been reaping the fruits. We registered a 6.1 percent GDP growth in the first semester of 2012, which is above the best forecasts and estimates, and 46 record highs for the Philippine Stock Exchange Index in the span of the 27 months of President Aquino’s administration.  Moody’s, Fitch and Standard & Poor’s have all placed us just one notch away from being considered investment grade. Moody’s said the improved assessment of the creditworthiness of the Philippines was based on its healthy pace of growth; improving fiscal performance of the national government; stable banking sector; and projected ability to keep a robust pace of economic expansion over the medium term. The World Economic Forum, in its most recent annual global competitiveness report, gave the Philippines a second consecutive ten-place jump, bringing us up to 65th place out of the 144 countries survey. Thus, over a two-year period, the Philippines has jumped over 20 places in the competitiveness ranking from 85th to 65th. The World Bank, for the second time this year, has raised its growth forecast for the Philippine economy.

Principled foreign policy

With our domestic and economic house in order, the Philippines has stepped up as a responsible treaty ally and regional partner. Our investments in our own defense and external security are just one part. We are also concurrently working to build a regional and global consensus behind a rules-based international order, beginning with the peaceful settlement of the disputes in the South China Sea in accordance with the UNCLOS.

Revitalized bilateral relations

Our reemergence as a responsible member of the international community, guided by our national interest instead of transactional politics, has been welcomed by our closest partners, including the United States.

The June 8 Oval Office meeting between President Aquino and President Obama reflected the heightened engagement between the Philippines and the US as demonstrated in the upward trajectory of high-level exchanges between the two countries.

As the US rebalances to Asia and the Pacific, our two countries have further exploited the natural complementarities in our defense and security strategies which have contributed to the stability and prosperity of the Asia-Pacific region for over 60 years.

In the context of our bilateral partnership and our regional engagements through ASEAN, the Philippines and the US have worked closely together to ensure the continued prosperity and security of our region.

Moving forward

Which brings us to the question of what now, and what next? What should we be doing to further move forward the bilateral relations? What else can we do to ensure to help both our countries grow economically? Can we be doing something more to secure the peace and stability of the Asia Pacific region?

To me, an exercise such as the one being undertaken jointly by the Johns Hopkins University School of Advanced International Studies and the US Philippine Society is a very good start. The involvement of the policy community in addressing such questions demonstrates that the engagement goes beyond administrations and beyond party lines; that it is fundamentally underpinned by a deep and abiding friendship between our peoples.

I therefore congratulate both the SAIS and the US Philippine Society, as I look forward to a productive day of open and productive discussions.

A pleasant good morning to all.