Good Governance Reforms Make PH Ripe for US Investment
WASHINGTON, DC—The Philippines has instituted irreversible good governance reforms, making the country one of the highest performing economies in the region, and creating opportunities for investment from the United States.
This was the message of Philippine cabinet secretaries who traveled to Washington on a high level trade and investment mission during the “Dynamic Philippine Economy: Growth, Reform, and Looking Ahead” forum at the Center for Strategic and International Studies in Washington, DC on 24 June 2015.
The forum’s speakers roster included Secretary Gregory L. Domingo of the Department of Trade and Industry (DTI); Secretary Cesar V. Purisima of the Department of Finance (DOF); Secretary Rogelio Singson of the Department of Public Works and Highways (DPWH); Ambassador John D. Negroponte, Co-Chair of the US-Philippines Society; Mr. Guillermo Luz, Co-Chairman of the Philippines National Competitiveness Council; Ms. Cosette V. Canilao, Executive Director of the Public-Private Partnership (PPP) Center; Mr. Andres Gluski, President and CEO of AES Corporation; Mr. Matt Bohn, Vice President and former Philippines Country Director, Millennium Challenge Corporation; Mr. Guillermo D. Luchangco, Chief Executive Officer and Chairman of the Investment and Capital Corporation of the Philippines; Mr. Robert Prieto, Senior Vice President for Infrastructure of the Fluor Corporation; and Mr. Bernard Sheahan of the International Finance Corporation.
In their keynote addresses, the cabinet secretaries highlighted reforms by the Aquino administration as well as in their departments, which have contributed to the renewed confidence of local and international markets as well as the Filipino people.
In 2011, Philippine Congress passed the Government-Owned or Controlled Corporations (GOCC) Governance Act, which ensures that the government exercises transparency, responsibility, and accountability in state-owned and –controlled corporations through a periodic reporting and evaluation system, as well as justifiableand reasonable remuneration schemes for employees of GOCCs.
According to Finance Secretary Purisima, the GOCC Governance Act is one of the key pieces of legislation that have led to economic growth.
“Once you walk your talk, the market will give you confidence. Confidence is the key currency that has allowed for economic growth to happen,” said Secretary Purisima.
Tax reforms have also played a huge role in development.
An example is the Sin Tax which aims to restructure existing taxes imposed on alcohol and tobacco goods. Duties on these products are now a potential revenue source for Universal Health Care Program of the administration.
“Tax reforms in the Philippines have generated double-digit revenue growth every year,” said DTI Secretary Domingo.”
The Department of Public Works and Highways, once considered to be one of the most corrupt government agencies in the Philippines, has also taken on landmark reforms.
“The main program of the DPWH is anti-graft and corruption. We deliver safe and better quality road networks by funding the right projects and making sure the bids are competitive and transparent,” said DPWH Secretary Singson.
The Department developed a Cadet Engineering Program, a workplace learning and development program that aims to identify young, vibrant, and intelligent civil engineers and prepare them to become competent members of the DPWH.
“We became more efficient by getting rid of the people we needed to get rid of, and by engaging young engineers to run the department. Right people and right implementation,” said Secretary Singson.
He added, “It is not a perfect system. It took several generations for the department to get where it is. In five or six years, the changes will still be in place. We are confident we have institutionalized the changes in the department.”
Development in the Philippines has been driven mainly by the human resource in the country. According to Philippine Ambassador to the US Jose L. Cuisia, Jr., human resources in the Philippines go hand-in-hand-hand with good governance as important elements in development.
“I only wish to emphasize that the Filipino people have always been the greatest resource of my country whether in the Philippines or overseas, whether in the boardrooms of top corporations or in the rural hinterlands of the provinces. This is why we continue to make critical investments in healthcare, social services, and education, in order to empower our people to become greater participants and stakeholders in growing the Philippine economy,” Ambassador Cuisia said.
Secretary Domingo echoed this sentiment, saying the key driving force of the Philippines’ development is the country’s human resource.
“Development was started by good governance but the key is in our human resources, said Secretary Domingo.
US officials and business leaders underscored the good governance reforms and economic growth under the Aquino administration, stating that the Philippines is poised to become a market leader and standard in the Southeast Asian region as the US works toward a rebalance to Asia.
“The Pacific future is happening now, and US-Philippines trade relations reflect that,” said Stefan Selig, Undersecretary of the US Department of Commerce.
Undersecretary Selig said strong market and government-to-government ties between the Philippines and the US, sustained GDP growth, and high level of trade between the two countries are among the reasons why the Philippines is one of the best performing markets in the region.
“The relationship is not just a building block but a predecessor of rebalance in Asia,” said Undersecretary Selig.
Matt Bohn, Vice President and former Philippines Country Directory of the Millennium Challenge Corporation (MCC), echoed Selig’s sentiment, citing improvements made by the Philippines in various international anti-corruption and good governance indexes.
“The Philippines has shown dramatic improvement especially in the control of corruption. This has to do with leadership—a committed president and a cabinet fiercely focused on good leadership and governance,” said Bohn.
With 2016 being an election year in the Philippines, there have been concerns over the sustainability of reforms instituted by the Aquino government. However, the officials at the forum unanimously expressed their optimism in the “irreversible reforms” that have been put in place.
Secretary Purisima cited the engagement of Filipinos in public issues through their improved access to information and presence in social media as a reflection of both the demand for accountability among public officials and renewed hope in the government.
“People have seen the value of good governance in their lives. We have not only an engaged citizenry but also an empowered citizenry. The youth will play a major factor in the election…and President Aquino is committed to having a credible election,” said Secretary Purisima.
The Secretary added, “People are now more engaged because they see that a better governed Philippines is a possibility in their lifetime.”
The Philippine officials agreed that the combination of irreversible reforms and renewed optimism make the country a prime place for investment by US businesses.
“Locate in the Philippines. My business proposal is US companies have to look at the ASEAN market. Come to the Philippines and compete in the ASEAN market,” said Secretary Singson.
“Dynamic Philippine Economy: Growth, Reform, and Looking Ahead” is part of the Washington leg of a high level trade and investment mission to the United States taking place from 24 to 29 June 2015. The cabinet secretaries will be heading to New York from 25 to 26 June and to San Francisco on 29 June.
Also present at the forum were Mr. Bruce H. Andrews, US Deputy Secretary of Commerce and Mr. Maurice “Hank” Greenberg, former Chairman and CEO of AIG, and Honorary Chair of the US-Philippines Society.
Moderators of the forum were Mr. Ernest Z. Bower, Senior Senior Adviser and Sumitro Chair for Southeast Asia Studies at CSIS; Mr. Matthew P. Goodman, William E. Simon Chair in Political Economy and Senior Adviser for Asian Economics at CSIS; and Dr. Scott Kennedy, Deputy Director of the Freeman Chair in China Studies and Director of the Project on Political Economy at CSIS.
The Mission is an important follow-up to the Philippines-United States Memorandum of Cooperation on an Infrastructure Collaboration Platform, which was signed during the 8th Global Infrastructure Leadership Forum (GILF) held in New York in February.
The Conferences are being organized in cooperation with the Philippine Consulates General in New York and San Francisco, as well as Citibank, Deutsche Bank, Development Bank of the Philippines, Goldman Sachs, HSBC, JP Morgan, Land Bank of the Philippines, Morgan Stanley, Standard Chartered, and UBS.
