From the Website of GPH - Government of the Philippines
Speech: President Aquino at the 41st PH Business ConferenceGPH Website
His Excellency Benigno S. Aquino III
President of the Philippines
during the 41st Philippine Business Conference
[Delivered at the Marriot Hotel, Pasay City, on October 27, 2015]
The greatest strength of capitalism is how competition in the marketplace pushes everyone to innovate, because that is the only way to truly gain a competitive advantage. Today, we do not need to look any further to find a living embodiment of the perseverance and entrepreneurial spirit necessary to make it in the business world–we have Mr. Alfred Yao.
Mr. Yao’s story is tremendously inspiring, and I believe it should serve as an example to all of us. During one trip early in his career, he encountered a new method of packaging that he believed would be the next step forward for the industry. Thus, he spent a large sum of money on the necessary machines. Unfortunately—or perhaps fortunately—when he began trying to sell his services to clients, they turned him away, perhaps because they didn’t see the need to innovate. Mr. Yao, however, was undeterred. He knew that investing in a business is not simply an investment in the factors of production; it is an investment in your own willingness to truly work. His response: He made his own juice brand, which is now the most popular juice brand in the Philippines—Zesto. [Applause]
Now, Alfred Yao is not just the CEO of Zesto. He has gone on to found firms in different sectors, including marketing, banking, hospitality, and the real estate sectors. It is important to note that, at any point in his career, he could have given up. He could have cut his losses on the machines, and pursued a safer, less risky, less innovative business, and yet he persevered. He knew that, during the moments when you work hard and still manage to fail, the best course of action is to work even harder, to tap your creativity, and pave new paths to success. This is why I am unsurprised, or not suprised that Alfred’s operations continue to grow to this day.
Of course, we are not at the Philippine Alfred Yao Conference; we are at the Philippine Business Conference. At the same time, I speak of him because he embodies the true spirit of capitalism. Ours must be a capitalism defined by its most progressive elements; it must continue to compete with one another, not in terms of who we know or who we can pay off, but in terms of the quality of our products and services—and in terms of how well we innovate. Our capitalism must be driven by vision and swift action—and proof of this is evident not only in companies, but also in the behavior of people.
When I was working in the agriculture sector in Tarlac, I encountered two types of planters: Those who were receptive to modern changes in agricultural practices, and those who were content with their daily and well-established routine. The latter were happy enough to minimize their inputs, which translated to maximum profits because they practically had no inputs. As expected, in the short term they were doing well, however, they were eventually outdone by those who chose to look for new ideas to improve their processes and their production methods. The result: Those who waited for the results of those who dared to innovate ended up very late in innovating their own plantations.
I continue to see parallels in the modern era. There are still those who are banking on crony capitalism, who seek only to protect their position as the big fish in a small pond; and there are those who will always work, innovate, and compete to gain the biggest share in the largest market possible. My belief is that any competent business manager should always be driven by growth. After all, is it not true what they say—that when you stop growing, you start deteriorating.
In many ways, the same vision and long-term thinking was demanded of our administration. There was a need for daring: to abandon the broken systems of political patronage, to go against entrenched interests and bring about true reform. There was the need to be strategic: to abandon the band-aid solution, and instead, focus on long-term solutions that would ensure sustainability and move us up the value chain. And, like any well-run business, if I may say so, we had to identify the “low-lying fruit,” opportunities for immediate benefit, and, when developed right, for long-term progress.
Take, for example, infrastructure. I think that all of you can agree that a literal transformation has taken place around the country: from airports and seaports, to roads and bridges, in our cities and in the countryside. In fact, as you may have seen in my last State of the Nation Address, there are so many testimonials from our Bosses attesting to how much our infrastructure investments have opened up the doors of opportunity. Even our harshest critics cannot deny that we have finished projects that have been promised for generations. The numbers do not lie: Under the Daang Matuwid administration, the infrastructure budget has more than tripled. In 2010, we inherited an infrastructure budget of P165 million. This has increased to P570 billion in 2015. This also means that, right now, our infrastructure budget stands at around 4 percent of a GDP that has grown at quite a nice and respectable pace pace, and we intend to have it reach 5 percent by next year. Efficient public-private partnerships have also helped us to get big-ticket projects done.
Might I note that we are not spending arbitrarily. We take on a holistic approach. We build based on a national strategy that truly seeks to address the needs of our people; we build, for instance, where farmers can most benefit from roads, where there are tourist spots waiting to be fully tapped; and where historical neglect has bred isolation and despair. These projects also follow the 5R’s, meaning they are the right projects done by the right people, with the right quality, for the right price, completed right on time. For example, the Metro Manila Skyway Stage 3 project being constructed now will vastly cut down travel time from Buendia in Makati to Balintawak in Quezon City from 2 hours to just 15 to 20 minutes. It will be that much easier for you to visit your facilities, or perhaps even visit prospective sites in Central Luzon and other cities farther up north.
Tourism is another low-lying fruit that has developed hand-in-hand with infrastructure. In 2010, we looked at the state of Philippine tourism, and saw its vast potential: the beautiful beaches and diving sites, and all the activities available, from climbing mountains to swimming with whale sharks. Unfortunately, at that point in time, there was a dearth of infrastructure. These past five years, the DPWH and the DOT worked together to develop 463 of what we call tourism roads. We have progressed at such a quick pace that Secretary Babes Singson now likes to joke that there is no waterfall in the Philippines that does not have a road leading to it.
The results of these efforts, amongst many other reforms, are clear. To give you a brief overview of the numbers: Our GDP has grown by an average rate of 6.2 percent in the last five years of our administration, the fastest five-year average growth in nearly four decades. From 2010 to 2014, we increased our net foreign direct investments almost six-fold. We recorded the lowest unemployment rate in a decade. Above all, we have regained the respect of the international community, going from the shame of being “The Sick Man of Asia” to being Asia’s new darling. Just look at the global rankings of competitiveness: The World Economic Forum’s Competitiveness Report has bumped us up 38 places since 2010, from 85th to 47th. The World Bank’s Ease of Doing Business Report has likewise raised us from 144th to 95th. Over the course of our administration, we have also received 22 positive credit rating actions, with the most momentous ones coming in 2013, when Moody’s, Fitch, and Standard & Poor’s all declared the Philippines investment grade.
But of course, we realize that all this is only one part of the equation for continued growth. This kind of performance is only sustainable if we can equip our people with the wherewithal to take advantage of all the opportunities that are arising. This is why, in the past five years and almost four months that we have been in office, we have massively increased our focus and our spending on social services. Towards this end, we have vastly expanded our Conditional Cash Transfer Program, through which around 4.4 million household beneficiaries receive cash stipends, as long as they ensure the education of their children. Now that the program covers high school-aged students, we help them have a better chance to earn more, as opposed to those who have just finished elementary level. Reforms have taken place at every level of education. K to 12 reform ensures that Filipino youth have a strong foundation for further learning, or for employment. Technical and vocational education has perhaps never been stronger, especially now that our Technical Education and Skills Development Authority (TESDA) is working more closely with the private sector to implement training programs. State universities and colleges are likewise implementing reforms to become truly relevant to the needs of communities they serve and the demands of the job market.
Might I add: These initiatives do not simply help our people capitalize on opportunities. When more of our countrymen are able to earn a decent living, it also means they are more empowered consumers who have a clear path to progress. It follows that they have a greater capacity to avail of the goods and services offered by companies, which consequently allows our companies—and our economy—to grow. What we see here is a virtuous cycle where inclusivity leads to growth, and growth leads to more inclusivity. In the same way that government views the Filipino people as partners in nation-building and growing the economy, it is my hope that you will likewise see your workers as partners in developing your businesses and making strong profits—as opposed to the antiquated view that they are mere factors of production. This is the surest path to growth; this is the best way to ensure that each and every one is invested in the success of your enterprise—and the success of the Philippines.
Looking back on everything that has happened over the course of my administration, I tell you today the best news of all: we’ve only just begun. While we have already achieved so much, I submit that we have not even scratched the surface of what the Philippines has to offer, which is why we have to nurture these beginnings. We have to protect the successes that the Filipino people have made; more than that, we have to continue and build on them. Sustained good governance likewise means sustained good economics; when bolstered by a depth of experience and ironclad integrity, it accelerates inclusive growth.
Each and every one of you here today knows this, and I am confident that you, like the rest of our countrymen all over the world, will do your part to ensure that the Philippines rises to greater heights. The world has already begun witnessing what the Filipino is capable of, and I am convinced that, if we continue working together, we can show them even more of our boundless potential, and ultimately prove that nothing is impossible to a united Philippine nation.
I perused the resolution that was handed to me earlier. I directed the Cabinet Secretary to prepare the appropriate response to update our partners in the business sector as to developments in the points that they raised. We’d like to tell you that a lot of it is already being addressed, and we’d like to tell you what to expect in the last eight months of our administration.
Thank you. Good evening.
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