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| President Gloria Macapagal Arroyo’s Speech during the General Assembly and Induction of Officers of the Federation of Philippine Industries and Launching of the FPI-FFCCCII Advocacy “Buy Pinoy – Buy Local” |
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Grand Ballroom, Hotel Intercontinental Manila, Makati City |
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May 02, 2008 |
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Thank you. Thank you Secretary Ermita for your introduction and thank you for being here at the same time that your brother is here. It turns out he’s a member of the Board of Directors of FPI. Now, we have a direct link between Malacañang and the FPI. Chairman Carlos, President Arranza, Executive Vice President Coseteng, other officials of FPI, other officials of the Philippine government -- we see Bayani Fernando and Bebot Villar here -- officials of the Federation, ladies and gentlemen. First of all, Congratulations to the newly-inducted officers of FPI. And thank you for working with the government and the rest of the business community and the labor community as well to promote the growth of the nation’s industries. Congratulations on your fight against smuggling! Congratulations on your joint project with the Federation on your “Buy Pinoy - Buy Local” campaign. The campaign against smuggling and the campaign to ‘Buy Pinoy,’ as Jess Arranza said earlier, are related to each other because as Jess quoted earlier, “When the buying stops, smuggling stops.” So, the move to ‘Buy Pinoy’ is a market-based solution to smuggling. Other things being equal, economists like me focus on market-based solutions except that many times economists like me interpret the market-based solution to mean that they don’t necessarily believe in buying local because they don’t necessarily believe that buying local is always in the best interest of the nation. The argument given in Orthodox Economics is that other things being equal, there are instances when it will cost a huge amount of money and create inefficiencies to merely buy local. But as has been said on this platform earlier other things are not equal when there is smuggling. And so, therefore, we support the campaign to buy local. And to support your campaign, I hereby instruct Secretary Ermita -- your brother in Malacañang -- to reissue our Executive Order regarding the Government’s Preferential Procurement of Materials and Supplies Produced, Made and Manufactured in the Philippines. The challenge here is to reconcile the legitimate interests of our local businessmen, on the one hand, with the obligation to make available the best goods and services for our taxpayers at the lowest cost from a truly open and competitive market. But given the track record of FPI in supporting our initiatives for a better life for our people, there is enough good faith and goodwill in FPI for us to master that challenge together. We share the challenge of fighting smuggling. The leaders of FPI here on stage and I also share a governance style based on faith and hard work. I have made tough and politically unpopular decisions to raise revenues and crack down on smugglers so that we could invest in our infrastructure and our people. There is no room in the development of our country to tolerate smuggling and the corruption that goes with it when so much remains to be done to invest in the nation. We have a lot of room to increase our tax and customs collections through strengthening investments in technology and innovation, bolstering our compliance and anti-corruption efforts, and regulatory and legislative reforms we will deliver on the necessary revenue to balance the budget and make the vital investments that have been neglected for a generation. We count on FPI to help implement new innovations and also to evaluate the use of sophisticated technologies that will allow us to increase collections. We will soon have watchdog bodies for the Bureau of Customs, as mentioned by Jess. I note a recent report that the PORTALS program linking customs with industry sectors is getting ready for start-up. We expect the FPI to be part of the PORTALS. I guess some of you might have noticed that I was on the phone and on the text while I was still seated, that’s because I called up Customs, and you know earlier when we were in Customs there was a name that keep frequently coming up among the importers, about three cases, successive, that with the reports from industry or with our spot checks they came out and now charges are being filed against them. In fact, charges had been filed against them and new charges are being filed against them. So I said, the problem is how did they get accredited to begin with. So, I asked Jess Arranza earlier, “Remember the last time I spoke before the FPI, I said I want you to be part of the Accreditation Committee.” So he said, it hasn’t been done yet, that’s why I called up Boy Morales. So he said, “Please tell them it’s going to be done. FPI will be part of the new Accreditation Committee.” You see Boy reorganized the Accreditation Committee, because precisely as I said, how come this guy gets caught three times in a row. How did he get accredited in the first place? So, Boy had to reorganize the Accreditation Committee and in this reorganized Accreditation Committee you will be there. I have put a lot of pressure on our Customs Bureau. You’ve seen part of it on TV, a lot of it is also behind closed doors and executive sessions. But I have also taken an interest in making sure that this area gets the support it needs for me to deliver positive results. But the principle of “No buyers, No sellers” -- if there are no buyers, there will be no sellers -- applies not only to smuggled goods. It also applies to the anti-corruption program. So, I ask the FPI to make sure that the private sector does not seek “slight favors” from your working friends in the Customs. That should be one of the responsibilities of FPI -- that kind of culture in the business community From the day I took office, we have been focused not only on protecting our industries from the unfair competition of smuggling but also on modernizing every aspect of the underpinnings of global competitiveness, so that you will be at par even with the fair competition. And we have in last year’s State of the Nation Address... no, two years ago in 2006, I enumerated the strategic areas where we are working, investing in a comprehensive program on competitiveness including: 1. Making food affordable to keep our labor cost globally competitive. And I’m glad, as was mentioned earlier -- was it Ito who said? -- that the labor sector has been very cooperative with us. And it is only right that we make sure that their food remains affordable; 2. Reducing the cost of electricity to make our factories regionally competitive; 3. Modernizing infrastructure to efficiently transport goods and people; 4. Mobilizing and upgrading knowledge and technologies for productivity; and 5. Reducing red tape -- and the ultimate red tape is corruption -- reducing red tape in all agencies to cut business costs. Let me say a little bit about each of these five. On food, we have been working on agricultural modernization, from the development of new hybrids -- which we have been working with the IRRI, for instance. I just came from there today -- to see how their new innovations can be rolled out. To unprecedented investments in irrigation -- 1.4 million hectares, never seen before in history. And to dramatic increases in loans, four-fold as a matter of fact, to help our farmers purchase better equipment. But as Ito mentioned, there are global clouds on the horizon that are driving up the price of oil and food, particularly rice. And again as Ito mentioned, thankfully, we are now in a vastly improved position to weather this storm than at any other time in recent memory. I’ve seen this coming for some time now -- certainly before the world took notice. That is why we were reaching out to Thailand and Vietnam for rice supply long before the headlines. So don’t be alarmed by today’s headlines, both Thailand and Vietnam and other neighbors elsewhere, have already concluded contracts with us of 1.2 million metric tons enough to cover the 10 percent differential between our production and our consumption. If we’re to go into the market again it’s for buffer stocks so that’s why it’s a “take it or leave it” situation as far as NFA is concerned. In other words, we can take it or we can leave it, depending on how the prices are. We are managing the issue the best way possible through our three-step program to contain price and prevent a crisis. FAO named 36 countries in a rice crisis. Certainly, the Philippines is not one of them. FAO has said that too. One of the three phases is to ensure supply, which as I just mentioned earlier, we have essentially done for the foreseeable future. Two, guarantee distribution, particularly to those most in need, and we are doing that through our own distribution to schools when classes start, as well as through the church and religious network. Third, we are ensuring enforcement of consumer protection by a fierce effort to crack-down on rice bandits especially those who divert NFA rice and tag it as commercial rice so they can get a higher price for it. On the second area of competitiveness – electricity. I have been wondering aloud why power costs in Luzon, in the Luzon Urban Beltway, where many of you operate, should be so high when Luzon is reliant on imported oil for only one percent of its power. And therefore we know there is room for improvement in the rates. I have instructed NAPOCOR to charge Meralco only P4.11 per kilowatt hour, the same rate it charges Luzon Electric Cooperatives, instead of the 6 to 10 pesos at which Meralco has been buying from NAPOCOR and from WESM at peak hours. Last night, at a meeting after midnight -- one of the very few meetings we have after midnight because Ed and I usually sleep very early -- but Ed was in the meeting and we are happy that when we were asking NAPOCOR to account for it, they did even better. The generation cost of high load factor PEZA Ecozone locators has been reduced to an average NPC billing rate to Meralco not of P4.11 but of P P3.52 per kilowatt hour. There are a number of petitions I instructed to be filed before the Energy Regulatory Board: 1) Is to enjoin MERALCO from buying electricity from WESM at peak hours; 2) Is to ensure preferential treatment for poor households and power-intensive industries in the distribution of Transco charges by Meralco; 3) Prohibit Meralco’s system loss from being charged as a separate item. Remember these are petitions we don’t know how ERC will finally judge and they’re independent of us, so we can’t dictate on them how they will judge; 4) To require Meralco to charge the same as VECO, CEBECO or Davao Light, whose distribution charges along with all the 140 utilities and cooperatives are all lower than Meralco. We spent last night, or maybe this dawn Ed Ermita and I and a couple of officials who are involved in the petition, where the papers are, what are the missing links, how can they fast track. To make a long story short the ERC will hear these petitions on Tuesday, May 6. Yes, Jess Arranza said you will be there. Please be there with all your legal luminaries because this is going to be a tough legal fight. And you will be the beneficiaries, your workers will be the beneficiaries, your consumers will be the beneficiaries, the Filipino people will be the beneficiaries, but you are the ones with the means and the articulateness to be able to make a good case before the ERC. In the other branch of government, Congress is in the process of amending the Electric Power Industry Reform Act to remove the requirement of 70 percent power privatization for open access because open access will give industrial consumers like you... we allow industrial consumers like you to enjoy the power of choice which will also mitigate the cost of electricity. On the third item, infrastructure. This year, investment, public investment will be about 200 billion pesos from the national government, the government corporations and the local government for among other things 9,000 kilometers of roads together with other investments in education, healthcare and training along with new bridges and ports to upgrade our competitiveness among others. Investing in the vital infrastructure also includes building up our environment as a reflection to our commitment to the quality of life. People need to breathe clean air and swim in clean water while also building manufacturing and bridges to span our waters. Speaking of clean water. Last Earth Day, we celebrated the environment and the theme of the DENR was “Clean Water.” We had a Cabinet meeting on that day, Tuesday is a Cabinet day. And Secretary Ermita gave us his program on the requirements for clean water. One of the most important waters we have to clean is the Pasig River. And one of the most important reasons for why the Pasig River is not clean is that we have only a five percent coverage, sewerage coverage in Metro Manila. Now sewerage is the responsibility of the two concessionaires so I guess if we want to really be competitive, FPI should also help us to be very persuasive with the two water concessionaires to fast track their sewerage system for which they are charging us after all. Boosting spending on infrastructure, we are also building a firewall against any global economic volatility and we are creating a springboard for further growth to ensure we are able to sustain our economic momentum. On knowledge, as part of the billions we are spending in education and training, we are investing three billion pesos in Science and Engineering Research and Technology Development, including scholarships for masters and doctoral degrees in Engineering in seven universities. Upgrade know-how and learning, and Filipino talent is unbeatable. Speaking of learning and training, I’m glad to hear about the interface between FPI and TESDA, in order to tap TESDA’s resources in education and training to improve the skills and capabilities of workers employed by FPI members. On red tape. Earlier this year, I instructed the Anti-Red Tape Task Force headed by Trade and Industry Secretary Peter Favila, who can’t join us today because after our dawn meeting he had to go to Indonesia to Bali for the Asean Economic Minister’s Meeting. But he heads the Anti-Red Tape Task Force. I tasked him and I tasked the Procurement Transparency Group of Secretary Nonoy Andaya to link up with the business sector, the academe and the church to draft reforms in government systems. Through constant consultations with your leaders,
and with all of you whenever we can, the Cabinet where Ed is the primus
interpares and I will continue to seek ways to improve... to help improve
industry efficiency. On your part, I encourage local industries to find,
defend and expand your competitive niches. We will continue to partner with you against
smuggling. That’s why we have Bebot Villar signing the MOA with FPI. And I’d
like to thank Mrs. Arranza because Jess says you’re the one who tells your
husband always to be supportive of me. No wonder you are there whenever we
need you. |