04/03/2016: NY FORUM TURNS SPOTLIGHT ON SUSTAINABILITY OF PH REFORMS
04 March 2016
NEW YORK CITY- “The Philippines will need to nurture the virtuous cycle of business confidence that good governance and good economics have engendered.”
This was the main message of Finance Secretary Cesar V. Purisima in his Keynote Address at the Philippine Business and Investment Forum (PBIF) held on 03 March 2016 at the Metropolitan Ballroom of the Sheraton New York Times Square Hotel.
The PBIF is taking place in the context of possible Philippine growth rates of 7-10% in the next decade and an HSBC Global Research Report predicting the country to be the 16th largest economy in the world by 2050.
“This Forum is a great opportunity for us to take stock of the incredible performance of the Philippine economy over the past number of years and to bring attention to the successful reforms that have driven the country’s economic transformation since 2010 when President Aquino assumed the presidency,” earlier explained Philippine Ambassador to the United States Jose L. Cuisia, Jr. who initiated the PBIF.
In his keynote address, Secretary Purisima outlined the important policy and strategic issues that the Philippine Government needs to address in order to maintain the sustainability of recent economic growth. He underscored the importance of good governance, particularly in the areas of transparency, freedom of information, rule of law, security, and accountability. He added that good governance is intertwined with good economics and contributes to the virtuous cycle of confidence that encourages optimism in the Philippines, both domestically and internationally.
On the issue of sustaining Philippine economic growth, Secretary Purisima emphasized certain areas of connectivity: infrastructure, policy, digital connectivity, and process. Secretary Purisima further touched upon the opportunities as well as challenges that the Philippines currently present such as ASEAN integration, climate change, investing and scaling up in many industries, such as IT/BPM, MSMEs, agriculture, and tourism, as well as diversifying geographically such as in Mindanao and the Philippines’ investment promotion areas.
Mr. Jose E.B. Antonio, CEO of Century Properties Group, speaking at the Lead Panel of the PBIF, told the audience that “good economic management has set the stage for future growth.” In the same panel, Chairman Arsenio Balisacan of the Philippine Competition Commission and former Secretary for Socio-Economic Planning, referenced the three key constraints to growth, namely, weak institutions, poor infrastructure, and peace and order. Chairman Balisacan said that “the Aquino Administration has tackled each of these basic constraints leading to the greater confidence of business and investors.”
Dr. Nouriel Roubini of Roubini Global Economics also noted that the success of the Philippine economic story can likewise be attributed to its openness to global and regional integration.
In a Keynote Address, former Trade and Industry Secretary Gregory L. Domingo echoed the points of Secretary Purisima and those in the lead panel. However, he added the importance of a large, young population of 100 million with a median age of twenty-three (23) years old. He stressed that this is an important demographic advantage that can be leveraged with proper investments in education and infrastructure.
In addition to the positive comments on the prudent economic management of the Aquino Administration, the PBIF panels discussed the way forward, especially in view of the presidential elections in May 2016.
“I was struck by the consensus among the speakers that the reforms and economic performance of the Philippines will be sustainable post-2016,” noted Ambassador Cuisia.
Dr. Roubini expressed the belief that, regardless of the results of the May elections, there will be policy continuity in the Philippines.
“The good news is this: Philippine economic dynamism, domestic demand, and its openness to the world can only mean that reforms will continue and deepen,” he said.
Mr. Antonio, on the other hand, reassured the audience that “it will be highly imprudent for any government, after President Aquino, to change the good things that have been undertaken in the last six years.”
The message of sustainability of economic growth was reinforced by the panel on the Philippine Competitive Edge composed of Perry Pe, President of the Management Association of the Philippines; Alex Cabrera, Chairman of PriceWaterhouseCoopers Philippines; John Hixson, Vice President for Corporate Affairs of Cargill; and Andres Edlefsen of the US Department of Commerce.
Atty. Pe lauded the legislative agenda of the Aquino Administration, which resulted in the enactment of important pieces of legislation that institutionalize economic reforms and good governance. He particularly cited the passage of the Philippine Competition Act and the Amendments to the Cabotage Law. Mr. Cabrera addressed the foreign equity limitations under the Philippine Constitution and argued that such limitations are actually very narrow and could easily be “ring fenced” by proper structuring of investments. He said that he is of the view that the ASEAN Economic Community will result in more pressure on the Philippine Government to liberalize and become more competitive. In response to a question during the open forum after the panel presentations, Atty. Pe and Mr. Cabrera stated their firm belief that the foreign equity issue should not be a serious hindrance to investments.
In a dialogue, Mr. Enrique Razon, Chairman and CEO of International Container Terminal and Services Incorporated; and Ambassador John Negroponte, Co-Chair of the US-Philippines Society, situated the future of Philippine growth in an era of integration, particularly in Southeast Asia. Both agreed that ASEAN integration, including eventually free trade negotiations in APEC and possible accession to the Trans Pacific Partnership, creates unlimited opportunities for the Philippines, but at the same time, there is the key challenge of ensuring that policies and infrastructure are in place in order to truly benefit from integration.
Throughout the discussions, key speakers also recognized the importance of the Philippines-US bilateral relationship in moving forward.
In his opening remarks, Ambassador Cuisia said that “the confidence of investors and our robust economic partnerships with key economies, such as the United States, constitute the solid foundations upon which our economic managers continue to promote the Philippines as fully open for business. These efforts become more vital if viewed in the context of the US rebalance to Asia.” This partnership between the Philippines and the United States was described by USTR Director Karl Ehlers as “strong, robust and resilient.”
Ambassador Negroponte thus reminded the audience that “the Asia Pacific region has become the demographic and economic epicenter of the world. It behooves any country, including the United States, to think very carefully about how to engage the region, a subset of which is the ASEAN sub-region.” ###