SYDNEY, Australia—The business establishment in Australia is bullish on the Philippine economy, with many movers and shakers in trade and investments looking forward to partnering with the “next tiger economy in Southeast Asia.”
At a business forum here with President Benigno Aquino III on Thursday night, the chair of Asia Society Australia, Warwick Smith, enunciated the prevailing sentiment of top CEOs in this part of the globe.
“It would be fair to say that this has been a remarkable transformation that has taken place in the Philippines since the election of the President,” Smith said.
He said that recently “one leading bank… indicated it’s (the Philippines) the fastest-growing economy in Asia, which is an area of concern to all of us here in Australia” amid the economic downturn in America and the debt crisis in Europe.
“Your commitment to growth and also the successful approach to a corruption drive as we’ve seen transformed the opportunities in the Philippines,” Smith said, telling Aquino that this “transformation of the Philippines would not be taking place without strong leadership … which is about commitment.”
Smith then quoted a portion of the inaugural speech of President Aquino in 2010, which, the businessman said, went into the very heart of commitment to public service: “My father offered his life so our democracy could live. My mother devoted her life to nurturing that democracy. I will dedicate my life to making our democracy reach its fullest potential: That of ensuring equality for all. My family has sacrificed much and I am willing to do this again if necessary.”
When Smith asked the President about the “industry, sectors, or services” he was looking at to really transform the Philippines as the “new tiger economy in Southeast Asia,” Aquino said his administration would harvest “low-hanging fruits” and focus on three particular aspects of the economy: Infrastructure, tourism and agriculture.
Aquino did not mention the huge potential for mining investment in the Philippines, but his new mining policy, contained in Executive Order No. 79, was discussed during a bilateral meeting in the Australian capital, Canberra, on Wednesday.
Smith also took time to quiz the President on the broader picture of finance in the global market, asking him if he had “an overall (medium-term) prognosis for where matters are going” with “leadership changes in China this year, the United States, a Europe that’s struggling.”
Aquino said: “I think there will still be pressures on everybody to become pessimistic or, if they want to be euphemistic about it, to be guarded. And when we were in the Apec (Asia-Pacific Economic Cooperation) meeting in Honolulu, Madame Christine Lagarde (director general of the International Monetary Fund) talked about the need to enhance domestic liquidity. And, to be honest with you, it really made me pause for a thought because it seemed like we were headed toward the same situation that existed before the Great Depression wherein everybody felt that they could successfully insulate themselves from the downturn in various other economies which, in turn, actually accelerated and deepened the recession and that led to the Depression.”
He continued: “So one would do hope that man has a capacity to improve. Shouldn’t this be the point in time that we should be finding ways and means to help the so-called weakest link in the chain? So either we stand together or we drown together.”
Aquino noted that governments in Europe are being asked to finally deal with the situation that used to be the proverbial “can that got kicked down.”
Approaching the crest
“I’m sure that very reasonable men and women are talking and that we will come to solutions that demonstrate our collective capacity to improve as species,” Aquino said.
“So how long will the continued malaise happen? The conservative will say quite a bit but I tend to be optimistic as far as the human spirit is concerned. I think what we have managed to do in the Philippines will happen in varying degrees elsewhere. I can’t tell you that we are about to crest the hill but I think we are approaching that crest. All it takes is a little bit of faith and optimism in our fellowmen,” he said.
People as asset
Asked by the Inquirer in an interview to explain how his administration would pursue this economic takeoff, Mr. Aquino said: “Basically they said the number one asset of the Philippines has to be the people. Therefore, it has to be investment in our people and that’s why [we make] massive investments in education and health.”
Aquino pointed out that the “inclusive growth” meant that the poor should benefit from the economic gains.
He also cited the current efforts to match the job requirements of local industries with what the educational sector was producing yearly.
Meeting Filipino journalists over coffee right after the business forum, Aquino reported the economic gains of his five-day state visits to New Zealand and Australia.
In New Zealand, he said the government of Prime Minister John Key pledged to help the Philippines increase its expertise in harnessing geothermal power.
The Philippines and New Zealand are two of the largest producers of geothermal power in the world, but it was New Zealand that helped the Philippines harness this alternative power source in the 1970s.
Also, Alliance Select Foods International Inc. formalized its $2.18-million share purchase agreement to acquire 80 percent of Akaroa Salmon NZ Ltd., a pioneer in salmon farming in New Zealand.
“What is impressive is we are becoming multinational,” he said, pointing out that Alliance Select Foods, a Philippine company, bought into a salmon farm in New Zealand.
Australia-based Austal will start building boats in shipping yards in Balamban, Cebu province.
On its website (http://www.austal.com/en/about-austal/Overview.aspx), Austal says it is a global defense prime contractor.
“The company designs, constructs and maintains revolutionary platforms such as the Littoral Combat Ship (LCS) and the Joint High Speed Vessel (JHSV) for the United States Navy, as well as an extensive range of patrol and auxiliary vessels for defense forces and government agencies globally. Austal also designs, installs, integrates and maintains sophisticated communications, radar and command and control systems.”
“Some 1,000 jobs will be created here,” Aquino said.
Telstra, a top telecommunications company in Australia that is already employing about 10,000 people in the Philippines, is seeking “further expansion and directly hiring their employees,” the President said.
AG&P is also starting a P200-million project in Batangas province, he said.
AG&P is a modular engineering, fabrication, assembly and asset management services provider to the offshore and onshore oil and gas, mining, power and civil infrastructure sectors, according to its website (https://agp.ph/).
Partnering with GSIS
MacQuarie Group, a banking and lending firm, has partnered with the Government Service Insurance System for a US$600-million fund to invest in infrastructure projects in the Philippines.
The Philippines also signed a new air services agreement with both New Zealand and Australia.
The Philippines also forged a working holiday scheme with New Zealand, where citizens of both countries, aged 18 to 30, could spend up to a year in either country, among others.
In his meeting with leaders of both countries, Aquino said he stressed the need for a stable region to allow economies to grow.