Welcome Remarks of the
Hon. Speaker Feliciano Belmonte Jr.
Meeting with the Joint Foreign Chambers
November 22, 2011
Distinguished Heads and Members of the Joint Foreign Chambers and the Business Groups of the Philippines, my Colleagues, and to our guests here today, welcome.
It is my privilege and honour to address you all in this Second Major Meeting between the House of Representatives and the business sector. This meeting once more provides a remarkable opportunity for strengthening our bonds of cooperation and solidarity toward the attainment of our common aspirations for further growth.
As you are well aware, the effects of the weakening US economy and the debt crisis in Europe are increasingly being felt worldwide. While strong in its macroeconomic fundamentals, the Philippines was not unaffected. The country’s economy slowed down, manifested by weaker-than-expected 4% GDP growth in the first half of 2011, primarily due to the contraction of investments and exports. As such, there is now even greater need to accelerate social and economic reforms in the country, and pursue overall goals and targets with even greater vigor and determination.
In particular, the Philippine Development Plan targets the following for the next six years:
• Reduction of poverty incidence by half to 16.6 percent in 2015
• Employment creation of one million jobs a year;
• A GDP growth rate of 7 to 8 percent a year;
• Increase in the investment-to-GDP ratio from 15.6 percent in 2010 to 22 percent in 2016; and
• Achievement of the Millennium Development Goals.
These targets embody the aspirations of our people, and as such can not be compromised.
The prevailing uncertainty in the global economic outlook, therefore, should not dampen our aspirations. Instead, it should serve as both challenge and motivation for us to work harder. One Chinese proverb properly states the following:
“A crisis is an opportunity riding the dangerous wind.”
And indeed, for every crisis, there is always opportunity.
Today, the Philippines is in a relatively better position compared to those of previous crises such as the 1997 Asian Financial Crisis and the global economic crunch of 2008 to 2009.
Over the last decade, the Philippines has transformed itself into a country with sustained structural current account surpluses and rapid reserve accumulation. Our gross international reserves expanded to a record of US$62.4 billion as of end-December 2010. As of end-June 2011, these reached $69 billion. This large stockpile of international reserves provides a healthy buffer against external shocks. Meanwhile, special deposit accounts with the BSP reached $1.5 trillion as of July 2011 – 41.7% higher compared to the level last year.
Remittances continue to contribute greatly to the Philippine current account. Additionally, the Business Process Outsourcing (BPO) industry which is growing at an average rate of 20% annually, is one of the Philippines’ most promising sectors, and is one of the driving factors behind the improving net services trade balance annually. With consumption accounting for more than 70% of GDP, the structure of the Philippine economy is already similar to those of advanced economies. All these factors partly account for the economy remaining afloat.
On the fiscal side, our resources have been prudently managed. There is progress in fiscal consolidation as the January to August 2011 deficit was contained at P34.4 billion which is only 11.5% of the full year program at P300 billion. Tax collections, comprising about 90% of revenues, rose by 10.4% year on year owing to better tax administration.
Efforts at keeping the macro economy stable have borne fruit with the three major credit rating agencies upgrading the country’s rating in recent months. Both Moody’s Investors Service and Fitch Ratings upgraded their credit ratings of the Philippines in June.
Our overall competitiveness has also improved slightly. This year, the global competitiveness rankings of the Philippines in the World Economic Forum improved by ten notches from number 85 to number 75 out of 142 economies. We made significant improvements notably in nine out of twelve pillars including “macroeconomic environment”, “technological readiness” and “institutions”.
It is heartening to note that public trust and confidence in all branches of government have improved. The Pulse Asia survey for August to September in particular shows that 48% of Filipinos from the previous 41% expressed approval of the performance of the House. And our trust rating too has gone up.
However, these positive developments should provide no room for complacency. There remain vital weaknesses in our economy that immediately need to be addressed. We continue to rank low in the area of infrastructure particularly in the areas of port facilities and air transport. We also know there is much to be improved in terms of managing public funds, waging counter-corruption, enhancing the legal framework to make it more conducive to investments, and promoting transparency in government decisions.
Thus, we started our Second Regular Session with a great sense of urgency. After weeks of extended committee work and nine days of marathon plenary sessions, we managed to approve the proposed P1.8-trillion General Appropriations Act for 2012 in September. We passed the budget in full recognition and consideration of the possible opportunities and threats that our economy would possibly face in the coming year.
In doing so, we made a conscious effort to adhere firmly with the principles of promoting accountability and transparency, and in awareness of the need to fight a sustained war against poverty. We therefore attached in the spending bill fiscal consolidation initiatives which are designed to achieve the following: one, narrow the fiscal deficit; two, reduce the debt burden; and three, increase our revenues through greater collection efficiency.
Even as we worked tirelessly on the budget, we kept a keen focus on our reform agenda. I am pleased to note that most of your recommended priority measures are already included in the official priority list of the House. Notably, almost all of your recommendations already have corresponding bills. And the good news is that our shared legislative priorities are already in advanced stages in the legislative mill, with many on Third Reading.
Moreover, we in the House recently initiated a Legislative Summit with our Senate counterparts and firmed up our common list of priority measures in order to fast-track the passage of said measures. In addition to the LEDAC priorities, the House and the Senate have agreed to prioritize 64 other legislative measures including possible amendments of the restrictive provisions of the 1987 Constitution. I am therefore confident that the shared priorities of the House and the Senate will be focused upon and seen through to their logical end.
I cannot overemphasize that our work is far from over. On this note, let us continue to work together, move forward and build upon this work that we started together. Hand in hand, let us seize this great opportunity to make our objectives for growth a reality. Our overarching goals, in essence, are truly one and the same. Thank you to each and every one of you, and a good day to all.
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Source: Philippine House of Representatives, Official Website, Nov. 23, 2011
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