Prospects for the Philippines

Remarks by 
Ambassador Francis J. Ricciardone, Jr.
FOCAP Conference
January 13, 2003
Mandarin Hotel, 
Manila

It's a special pleasure to start the New Year with the Foreign Correspondents Association of the Philippines.  Thank you, Gabby Tabuñar, for extending me the privilege of joining you and this distinguished panel to discuss the "Prospects for the Philippines."  And thank you, Secretary Roco, Secretary Golez,  Senator Angara, and Mister Dee for your words of inspiration in our conversation today.

Like my fellow panelists, I am an optimist -- by nationality, by nature, and by conviction.  And this New Year is a particularly good time to be optimistic about the Philippines:  As we've witnessed today, President Macapagal-Arroyo's bold decision of December 30 has added electricity to the air.  I choose to believe that her action heralds new dynamism and fresh hope for the fortunes of the Philippines, and thus for mutual Philippine-American interests.

But it seems to me that this country and this government had already accomplished meaningful and important milestones in 2002.  Against the negative headlines that seemed to dominate the media last year, it's worth taking a few minutes to review a few of the economic, security, good government, and other achievements of Filipinos and their government this past year which bode well for 2003.  

GDP growth of about 4% was respectable in a year when the world's leading economies grew slowly.  In fact, the RP is actually coping rather well with the challenges of globalization -- in some ways, better than we in the United States.  For "globalization" is not a philosophy that is somehow "preached" by the developed countries, or that benefits the developed countries at the expense of the developing countries.  Evidence lies in the Philippines' highly favorable balance of trade:  indeed, with the United States, the Philippines evidently continued or even expanded its standing 3:2 advantage in exports to the US vs. imports from the US.  Exports from U.S. electronics firms that have invested here were a particular bright spot in the Philippines' global competitiveness, and increased over the previous year.  UPS opened its hub operation at Clark, and the S&R Price Company doubled its investment to nearly $50 million.  

The Malampaya infrastructure project -- another successful foreign investment with substantial private American participation -- had an immediate impact in its first year.  Malampaya greatly improved the nation's energy security by diversifying its sources, providing domestically-produced natural gas for 25% of Luzon's needs.

  Building on former Agriculture Secretary Angara's advancement of science in Philippines agriculture, The Philippines became the first country in Asia to approve biotech food crops for commercial production and sales.  This will raise incomes for both small and large farmers, lower consumers' costs, lessen the negative effects of pesticides on the environment, and increase the domestic food supply for a burgeoning population.

The last time I was at FOCAP, only half a year ago, I spoke out in support of President Arroyo's campaign, and the campaign of Chief Justice Davide, against corruption.  In that short time, Chief Justice Davide, Justice Panganiban, and other judicial leaders have realized notable milestones in their ambitious and vital program of reform:  Justice Davide has acted to curb the rampant abuse of Temporary Restraining Orders, and to encourage mediation as an alternative to formal court proceedings.  Also, the Supreme Court acted resolutely to give effect to the Treaty between the United States and The Philippines on extradition -- by confirming, in a landmark ruling at the end of the year, that no citizen -- no matter how wealthy and no matter his official rank -- is above the law.  

And the Congress is considering legislation to give further, vitally needed impetus to what must necessarily be a long process of systemic reform in order, in Justice Davide's words, to strengthen the Filipino citizens' -- and foreign citizens' -- confidence in the institutions of justice in this country.   

Meanwhile, the legislative and the executive branches together produced important legislation late in 2002 that, when implemented, will improve government procurement procedures, reduce banking industry debts, and protect the intellectual property of the creators of new plant varieties.  And, a comprehensive new anti-drug law establishing the Philippines Drug Enforcement Agency -- if implemented and supported with resources -- will help mitigate the scourge of illegal drugs and all the damage to the nation that they bring with them.

Secretary Golez has referred to the tripartite counter-terrorism agreement with Indonesia and Malaysia, which other nations have now joined.  This is a fine example of the Philippines' regional weight and leadership in countering terrorism.  The Government also facilitated a significant step forward on the multilateral South China Sea dispute leading to a new ASEAN accord with China.  

The Philippines also won a major diplomatic campaign as it gained world support in identifying and dealing with the Communist Party of the Philippines and the New Peoples Army for what they are:  not innocent or romantic "revolutionaries," but criminal terrorists who bleed the poor; who destroy the basic economic infrastructure of the Filipino people; who murder anyone they deem in their way; who mock the sovereignty and the laws of the country by using the national media to demand payment of what they call "revolutionary taxes."  Such groups and their numerous factions and fronts entrench poverty by diverting both domestic and foreign investment and tourists to other countries that welcome them -- including some countries that still espouse communism. 

Let us hope that, in the coming year, members of such groups in the Philippines will turn from violating their own country, and instead join both the Government, non-governmental organizations, and entrepreneurs who, in small ways and large, are heroically attacking the real enemies --  poverty, ignorance, and violence. 

 The U.S. is proud to have supported the Republic of the Philippines in reasserting its sovereignty and providing new security for the people of Basilan, where a gang of warlords masquerading as Islamic revolutionaries had terrorized the people.  No longer tolerated by the people of Basilan, with the exception of a few gang members quivering in hiding there, the Abu Sayyaf Group has fled to neighboring islands where they are under relentless pressure by the Armed Forces of the Philippines.  Our joint training exercises scheduled for 2003 will build upon the successful Balikatan 2002 exercises to further strengthen the ability of the Armed Forces of the Philippines to root out the Abu Sayyaf terrorists.  

So there was real progress on many fronts in 2002.  However, urgent challenges do lie immediately ahead.  There are no easy answers.  The kind of courage and sacrifice shown by President Macapagal-Arroyo will be necessary from many more national leaders to meet those challenges and to turn them into opportunities.

With the first anniversary of my service here fast approaching, I've now met so many dedicated, patriotic Filipinos in all branches of government and in all walks of life that I am very confident this country will seize this moment.  I believe the country will succeed, in particular, on the most urgent and vital of these challenges, simply because it must.  Failure is not an option.  I am confident that you will "reform," as the President has urged, and will not "perish."  

Let me touch now on a few of the most salient challenges and opportunities that foreign friends of the Philippines are watching most closely, and for which your success most directly matters to others in the region and the world.

The Senate and House leaderships have presented the country both its earliest challenges and its first opportunities for powerful boosts to President Arroyo's call for a "Strong Republic."  

The Senate, for example, could still beat the February deadline of the world Financial Action Task Force by passing pending legislation to strengthen the country's financial system against terrorists, kidnappers, drug smugglers, people traffickers, corrupt officials, and gun runners.  I refer to the Drilon/de Venecia/Magsaysay/ Lopez Bill to strengthen the rule of law against money laundering. The right reason to do this is to give the Filipino citizens and their banking system the literally world-standard legal protection they deserve.  Another compelling reason, though, is to avoid the international opprobrium and financial penalties that will ensue if some people succeed in blocking the amendments supported by the legislative leadership and the Administration.  

Another relatively low-hanging and particularly important fruit that the Senate can harvest for the people right now is the privatization of the National Power Corporation.  Passage of the Transco Franchise bill is vitally necessary to reduce the government's crippling debt burden and to demonstrate that the Philippines welcomes foreign investment in the energy and other sectors.  (By the way, I am aware of not one US firm among the prospective bidders for NPC; I speak purely as a supporter of the Government's efforts to unleash the Philippines economy to grow this country out of poverty.)  President Arroyo has repeatedly called for action on this bill.  The Arroyo Administration and the legislature began this farsighted and vital national economic reform with the landmark Electric Power Industry Restructuring Act of 2001.  

If narrow interests prevail and block advancement of this restructuring, the citizens will hold them directly accountable for the high power prices and blackouts that will certainly result early in the tenure of the next president and legislature.  I'm confident the Senate will step up to the challenge of upholding the public interest in an efficient, open, fair, and world-standard bidding process.  

Another measure needed to strengthen the  Philippines in the global competition for investment and jobs is passing the pending Optical Media bill, along with serious enforcement of that and existing legal protections for intellectual property.  These measures are urgent and essential to protect Filipino artists and designers in all fields, especially as lower-skilled manufacturing jobs inevitably migrate to lower cost labor markets.  

Meanwhile, with rigorous enforcement, the new Clean Air Act promises a healthier life and stronger economy for all who live here, Filipino and foreign guest alike.
  
As the Government seeks to win the high-paying jobs that other countries are gaining in the tourism industry, another opportunity -- and yes, competitive challenge -- is to seize the initiative to liberalize civil aviation.  Don't blame foreign travel advisories for the high air travel prices that keep foreign tourists flying past the Philippines to other regional destinations -- or for the lack of seats at any prices for Overseas Filipino Workers in certain countries when they try to come home on leave from their hard work abroad.  No one claims that a full "Open Skies" policy alone is a panacea or a sufficient step to make the Philippines competitive as a tourist destination or to drive down air cargo costs.  But it is certainly a necessary one.

There is also comparatively low-hanging fruit when it comes to strengthening the Republic against terrorism -- without the resort to arms or other expensive defensive measures.  Secretary Ople has indicated that the Government will sign the remaining one of the twelve UN Counter-Terrorism Conventions that the Philippines has not yet signed, that on the Chemical Marking of Plastic Explosives, and will send it promptly to the Senate for ratification.  Likewise, the Administration and leading Senators have indicated their intention to complete long-stalled action to ratify the other five UN Counter-Terrorism Conventions, whose protections the Filipino people certainly deserve.  And we support President Arroyo's call for a strong Anti-Terrorism Act to protect the Filipino people while protecting their civil liberties.

Our counter terrorism cooperation last year included diplomatic, financial, legal, intelligence, and law enforcement elements.  We will build on all of these in 2003.  In particular, our Embassy legal team is expanding -- at the direct request of President Arroyo -- and will deepen our cooperation with Philippine legal authorities to build the cases to extradite criminals in both directions, prosecute them successfully, and strengthen the rule of law in both countries.  Under our Mutual Defense Treaty and Visiting Forces Agreement, we plan a robust program of joint military training exercises for 2003.  

Our USAID mission will extend our support for the central government, the ARMM, and local NGOs to enhance the livelihood of former combatants in Mindanao.  USAID will assist with enhancing health care; protecting the environment; improving provision of basic services such as electricity, water, and telecommunication; and fostering good governance.   We will support the visionary activists at all levels who are opening still more opportunities for individuals and communities to prosper.  Such partners in development could include local leaders even in the troubled areas of the Cordilleras, or those in the areas under MILF influence in Mindanao.  

The only commitment needed from community leaders in any given area whose people may desire our development support is to chose development and enforce peace.  Violence in the name of whatever political cause must be a phenomenon definitively in the past.  Indeed later today I'll be meeting prominent Mindanaoan businessmen to reiterate the offer that I made while standing at President Arroyo's and Secretary Golez's side in Cotabato province in a driving rain last July.

As we stand with the Government of the Philippines to meet the challenges that terrorism presents, the U.S. embassy will continue to serve the needs of Filipino travelers to the United States.  Our consular section is one of the few in the world that did not see a decline in the number of applications for immigrant and non-immigrant visas in 2002.  Our Veterans Affairs and Social Security Administration offices continue to serve Americans and Filipinos who qualify for their programs.  In cooperation with Philippines authorities, we've had great success in 2002 against consular document swindlers and other crooks who sought to cheat Filipinos and violate US and Philippines laws.  We'll have more such successes in 2003 in support of our hosts' "Strong Republic." 

The list of challenges and opportunities for 2003, then, is long.  But the United States stands with the people of the Philippines and their leaders in welcoming them.  As President Arroyo has made emphatically clear, we can waste no time or energy on cynicism or political maneuvering.  For all the setbacks and the long road still ahead, the Philippines is making real progress toward good governance, good business, good communities, economic growth and reform, and strengthening the rule of law.  I hope that this year, the members of FOCAP will report and analyze the advances of this country as fully and as often as they cover the petty scandals, setbacks, rumors, and personal vilification.  Those phenomena really don't accurately portray the real character of a wonderful people and their bright prospects.

To all members of FOCAP and my panel colleagues, I warmly wish a Happy New Year, and Mabuhay.  Salamat sa inyong lahat.
 

 

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