His Excellency Benigno S. Aquino III
At The Citibank Economic Conference
[September 22, 2010, New York City]
It is a pleasure to be here in the United States and in the presence of distinguished business leaders who took the time to participate in this important event. I have been reluctant to travel overseas much given the number of urgent concerns at home. But the sudden surge in investor confidence in the Philippines convinced me to seize this opportunity to share with you our recent gains, and the plans we wish to pursue to put our country back on track.
I’m aware that doing business in our country has sometimes been a cumbersome, complicated process. It has not always been a level or clear playing field. As a result, investment in the Philippines has lagged behind our neighbors.
I was elected to office on the promise to fight corruption and do better for the poor. I recognize that in order to do that the engines of commerce must be running at full throttle. Robust economic growth, fueled by the private sector, combined with thoughtful government spending on social services is the solution over the long term.
Let me be crystal clear: to achieve our social goals, it is imperative that we in the Philippines create a climate for private enterprise to profit and thrive. And this is what we have begun to undertake.
Earlier, our Secretary of Trade Gregory Domingo and Secretary of Finance Cesar Purisima presented our economic and fiscal agenda, and outlined some of of the reforms we are putting on the table. These include, but are not limited to simplifying the process of establishing a business, improving infrastructure, and relaxing regulations on air travel to and from the country.
Allow me to illustrate what we are doing with two specific examples. The P1.645 trillion national budget that we proposed for 2011 puts in place the zero-budgeting scheme, which required a review of existing programs, termination of programs that no longer fulfill their intended outcomes, and a reduction in the funding for programs that needed to be redesigned. We have tightened restrictions on congressional pork barrel and reduced, if not removed, many opportunities for wasteful, and possibly corrupt spending practices. This has not necessarily endeared me with my former colleagues, but it has allowed us to increase spending on education, healthcare, and much needed emergency cash subsidies for the poorest of the poor, at the same time reducing our budget deficit as a proportion of GDP.
This kind of action is not dramatic enough to make it to the evening news, but I think you can appreciate how significant an investment of political capital it can be.
Now let me point you to an example that regularly makes the headlines back home. Our Bureau of Internal Revenue has breathed new life into its Run After Tax Evaders program and has already filed its 7th tax evasion case in just two months in an effort to plug revenue leaks. This early, the prospect of public humiliation and jail time has led to an improvement in our tax collection efforts.
It has only been three months. But this early, markets seem to be endorsing our actions. The stock market has hit an all time high on convincing value turnover. In addition, the recent Global Peso Bond offering raised 1 billion US dollars for the Philippines, with the issue being 13 times oversubscribed.
With this on hand, we invite the private sector to explore opportunities open for investments in key areas of the economy. By relieving the government of having to spend on items that investors can build manage more efficiently, scarce government resources are freed up for investments in education, health care and other social services. Over time these investments will see dividends in the form of better educated, more productive workforce, whose growing income opportunities will in turn spur consumption and grow the pool of skilled workers and the markets for products and services that many of you here today provide.
In closing I invite you to come see for yourselves what we’re doing to make sure that the Philippines is once again open for business.